The goal of this periodic blog (EgyDev) is to promote information exchange on access to quality energy services in developing countries including renewable, modern, biomass and household energy.

Thursday, December 12, 2013

What Drives Electricity Adoption? A Review of Connection Charges in Sub-Saharan Africa


Household Electricity Meter
Picture Credit: Douglas Barnes
Today many development agencies focus on the price and physical presence of access to electricity as being the main issue for lack of electricity in developing countries.  They may want to alter their thinking.  This is not to say that physical access and the price of electricity are not important, for clearly they are very important.  But a new study on Electricity Adoption and Connection Charges in Sub-Saharan Africa finds that an equally important factor may be electricity connection charges for new consumers.  Africa is the region with the lowest electricity access rates in the world (only 1 in 8 rural households and 1 of 2 urban households have electricity) and also is the region with the highest initial service connection charges.  One question not explored in this paper is the extent to which high connection charges are an indirect way for power companies to confine service to more profitable high income electricity users and to avoid political pressure to extend electricity to poor, low electricity using households. 

For electricity companies, expanding electricity to all makes quite a bit of sense for long term business development.  Electricity would contribute to economic development, and then more people could afford electricity.  As incomes grow even poorer people would buy more appliances and increase their electricity use, making them more financially attractive for electricity companies.  Thus, in the long term policies to expand electricity service make both solid financial and economic sense.

Monday, June 10, 2013

Energy Poverty and Income Poverty: How Do They Differ?


by Douglas Barnes, Shahid Khandker and Hussain Samad

There is a continuing discussion over what constitutes energy poverty with several approaches being used to define it.  But as yet, no consensus has emerged for measuring and monitoring energy poverty and explaining why and how it differs from income poverty.  After all, income poverty is a standard measure, so if the two are highly related it would not be worth the effort to develop a unique measure for energy poverty.  In other words, why create a separate indicator of energy poverty because in the end it would just be a reflection of income poverty.  Everyone seems to know about energy poverty,but truly defining and measuring it gets a bit complicated. 
About 10 years ago energy poverty was thought to be related mainly to lack of access to electricity.  More recently the United Nations and Department of International Development of Great Britain (DFID) have broadened definitions of energy poverty to multiple indicators using somewhat arbitrary weights.  International Energy Agency (IEA) has never actually defined energy poverty (except that it is related to lack of access to modern energy), but advocated that better ways of using biomass energy for cooking should be an important policy for household energy.  Also, most international organizations measure energy poverty indicators as outputs (e.g., lack of electricity connections) rather than outcomes (e.g., welfare gains from electricity consumption).  Thus, unlike income poverty—which is usually based on minimum consumption of food and non-food items necessary to sustain a livelihood—energy poverty lacks a well-established theory based on energy demand to establish a relevant poverty line. 

In several recent papers the authors of this post have taken a different approach, focusing on energy demand in order to define energy poverty.  Like income poverty, energy poverty may be defined by the minimum energy consumption needed to sustain lives.  This approach defines an energy poverty line as a threshold of energy consumption needed to sustain life.  Similar to the concept of income poverty, we reasoned that there had to be a point at which energy is essential for living.  After all, people have to cook their food; in cold climates they must heat their homes; and they generally need a minimum level of light in the evening for basic tasks (sometimes including eating).  In theory this is all well and good, but the question remained how to measure that threshold. 

Figure 1:  Energy End Use Energy Consumption by Income Class,
Bangladesh and India
Therefore, we tested this demand approach using rich household survey data sets from Bangladesh and India.  We found that although energy consumption rises with income, this increase is not uniform (Figure 1).  This is because energy consumption at lower income groups turned out to be somewhat flat--in economist's terms it is income inelastic (does not rise with income).  After those minimum levels, energy consumption increased for households with ever higher incomes--once again in economist's terms, income elastic (does increase with income).  The theory is that for those levels where the energy income relationship is inelastic, this is the minimum level of energy necessary to maintain a healthy life.  This is the basic level of cooking, heating, lighting or other energy service needed to sustain life. 

Monday, April 22, 2013

Resurrection of ESMAP Knolwedge Exchange Series 2005-2009


Between 2005 and 2009 I was the technical editor of an ESMAP Knowledge Exchange Series that involved the publication of four page summaries of current energy issues.   When I recently reviewed these notes after four years, I was struck by both the quality of these four page notes and the continuing relevance of the issues covered.  Also, most of the authors of these notes have 20 to 30 years of experience of working on energy in developing countries issues.   Because they are no longer very prominent on the ESMAP website, buried beneath more recent work, I have decided to resurrect them in this blog

I am sorry for the long delay between posts.  Both an illness and work somehow got in the way of working on this blog.  I have decided to revive it, but will not post as often as before.  But continue to check back as there will be more to come. 

Retroactively I have grouped these Knowledge Exchange Notes into four groups.  The first is on grid and offgrid rural electrification programs.  The second is on electricity generated mainly for the electricity grid.  The third group is biomass energy both for cooking and transport.  Finally, there are two notes on how rising energy prices impact the poor. 

Tuesday, February 8, 2011

The Basics of Wood Burning Stoves: A Case for Standards or Rating Systems?

Many people interested in better stoves know something about fire, smoke, health and new ideas.  However, to explain these on a more fundamental level that is understood by all can be difficult.  Therefore to explain the relationship between health and smoke, I turn to the late comedian Steve Allen who said that “Asthma doesn't seem to bother me any more unless I'm around cigars or dogs. The thing that would bother me most would be a dog smoking a cigar.”  For those who are promoting stoves innovations, I quote Mark Twain who says “The man with a new idea is a crank until the idea succeeds.” 

More seriously, I recently came across this nice brochure on space heating stoves that has been published by the California Environmental Protection Agency.  I was struck by this brochure because in a very simple way it publicizes the issue of smoke and health, the need for standards,  the basic principles of combustion and even the alternatives to wood stoves including gas and electricity.    These are many of the same issues that the clean cooking community today is attempting to communicate to the general public.  This brochure highlights the fact that improved heating stoves in the United States and other developed countries are now very efficient and burn very cleanly compared to past stoves.  But this was not always the case. 

Painting of Old Heating Stove in School
On a personal note, I can remember old coal stoves used to heat "temporary" small classrooms built to accommodate a sudden rise in student populations.  These "potbelly" coal heating stoves were similar to the wood burning stove in the picture.  At the time in western Pennsylvania coal was king and this was at the very end of the time period when people would heat with traditional coal stoves.  Was it smoky? Yes. Was it energy efficient? No. Did it give good even heat?  No.  Wast it durable? Yes. Was it safe? Yes. Was it cheap?  Yes.  Now of course schools are heated with modern systems. 

Even now there are legacy fireplaces and wood stoves that burn warmed air in the house which in turn draws in cold air from the outside.  Thus, the old traditional space heating stoves in developed countries are somewhat analogous to open cooking fires in developing countries.  The rather important exceptions are that the cooking fires and traditional cookstoves in developing countries typically are built of local materials by those who use them and they also do not have chimneys.

Tuesday, January 25, 2011

Energy Services for the Poor: A Review of World Bank Lending

A couple of years ago I completed this review of Modernizing Energy Services for the Poor:  A World Bank Investment Review 2000-2008.  This was followed by extensive reviews and then revisions.  And this was followed by new revisions and fresh reviews and so on and so forth.  I am happy to announce that this report is finally out and comments are welcome, but no more reviews please. 

Source: World Bank Investments in Energy Access: 2000-08(Figures are Millions)

It may seem like a trivial exercise to classify energy access lending, but nothing could be further from the truth.  When you think about it almost all energy investments can be considered as promoting or being related to energy access.  Energy sector reform makes it possible to have a well functioning energy markets, and this is turn means the electricity and other forms of energy can reach the poor.  Likewise, rural electrification would not be possible without generation and transmission projects.  So where do you draw the line for ruling in investments as relating to energy access energy poverty or ruling them out. 


Thursday, December 9, 2010

Much Ado About Energy Poverty: A Look Behind the IEA Numbers

The International Energy Association (IEA) has published a very nice special paper with the title Energy Poverty: How to Make Energy Access Universal.  This report makes a substantial contribution to the work on energy poverty and provides the updated figures on electricity access and the use of fuels for cooking.  The purpose of the report is to raise the issue of energy poverty to a higher level of international visibility.  This is quite a welcome tact by an energy agency that for many years has specialized in addressing issues of modern energy. 


I really like several things about this new report.  For one, the energy access and cooking fuel issues are well documented and nicely presented in tables and figures.  They also have made this publication free as supplement to the World Energy Outlook.  However, if you want the more country specific details you must purchase World Energy Outlook.  Finally, IEA has now added cooking fuels to the other types of energy they track to compliment their emphasis on electricity and other modern fuels.  This will raise cooking fuels to a higher level of public awareness and tracking their use is a very good idea for policy makers in the field of energy. 

The report also has some very high figures for the investment costs necessary to reach universal modern energy access by 2030.  At first glance, I thought these figures were too high, so I decided to “look behind” the figures.  I can tell you that that even for someone as seasoned as me this was not an easy task. 

Sunday, September 26, 2010

Impact of Rural Electrification in Peru: A "New" Study


 
A “new” report on rural electrification in Peru demonstrates the usefulness of conducting energy surveys to help with assessing policies for such programs.  The usefulness stems from the ability to not only estimate the benefits of rural electrification, but to analyze if the subsidy policies are both effective and well targeted. There are many ways to structure subsidies for rural electrification in developing countries (see previous blog on energy subsidies).  Some types of subsidies can be progressive and others well could be regressive.   Assessing the appropriativeness type of subsidy generally is difficult to do without energy survey information.  
Rural Energy Expenditures by Income Class in Peru
in Soles per Month (1 US$  = 3 Soles) 
Source: Peru National Survey of Rural Energy Use

In developing countries generally people with higher income spend more cash income on energy than those with lower levels of income.  This same pattern can be found in Peru as indicated by the figure.  It is somewhat expected that electricity and LPG expenditures in rural Peru increase significantly with increases in income as measured by total expenditures.  But interestingly even cash expenditures on fuelwood rise with income which indicates that there is even a willingness to pay for what is probably high quality fuelwood. One reason that it is necessary to have quality surveys is to track both the effectiveness and the targeting of subsidies.