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

By Doug  Barnes

 

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.

Improved Biomass Stoves For Bangladesh: Practice and Promise

Bangladesh has a better record in addressing rural energy issues than most countries. They have a very aggressive rural electrification program that is based on rural electric distribution cooperatives. There is an award winning program for promoting solar home systems in offgrid regions. Yet as we documented in our report on Bangladesh’s Rural Energy Realities the country has not been as successful in promoting ways to alleviate problems associated cooking with biomass energy on rudimentary stoves. This is in spite of the fact that bioass energy is so scarce that leaves and grass account for 15 percent of total rural energy use.

Bangladeshi Woman Cooking with Child:  Photo Prabir Mallik

Recently there has been a new report released on Improved Cookstoves and Better Health in Bangladesh.  For a preview there is a online version of the report at the bottom of this blog.  This report is provides a new twist to work on improved or advanced biomass stoves. Not only does the report review programs in Bangladesh, but it also draws lessons from successful international experiences and water and sanitation programs.  The picture to the right has graced the cover of several reports and it was originally taken by Prabir Mallik on one of the assignments that took place during the project.

Many of the existing programs in Bangladesh are promoting what we have called in previous blogs artisan stoves. There are not too many successful examples of artisan programs in the world. Most of the programs that flourished have had at the very minimum manufactured parts as was the case in China and Guatemala.  A promising new development is that within the last couple of years Grameen Shakti (see text below the break) has recently entered the picture in Bangladesh to promote improved stoves, and they are manufacturing some of the parts such as stovepipes and grills, but the firebox of its stove is still made from local materials such as clay or mud.

What are the recommendations of the new Bangladesh report? The main recommendation is to move towards higher quality stoves that are proven to be more energy efficient and lower household air pollution. Here are some key quotes from the executive summary.

Lessons from the international programs emphasize the need for a wide range of efficient stove designs tailored to user requirements as a prerequisite for program success. They should have proven efficiency, the ability to reduce indoor air pollution, and good durability and safety. Further, the viability of the program in the long term often depends on strong commercial approaches to promoting stoves. Targeted marketing has also been seen to be an effective strategy; stoves should be marketed to households facing fuelwood scarcity or high costs of purchasing wood, as they would be the most likely group to benefit from improved stoves, at least in the initial stages of a program.

The review of the status of improved stove programs in Bangladesh, along with the best practices from around the world, leads to several recommendations for consideration. One clear message is the need for a more unified program without diminishing the creativity of the various groups advocating improved stoves in Bangladesh. In fact, creativity and a wide variety of approaches should be encouraged. The government’s role is not necessarily to be the main actor, but rather to facilitate a process that promotes variety, improved durability, better safety, and greater efficiency of improved stoves.

Where is Energy Poverty's REN21?

There is quite a bit of work going into monitoring and evaluation in developing countries today. This is mainly due to the international donor’s need to document that their projects either work or do not work. However, the effort to track international energy demand--as opposed to energy production--has lagged behind these efforts.

Rural Electrification, Peru:  Photo Laura Berman

For energy at least, there are several sources for international energy statistics such as rural electrification, renewable energy, and other forms of energy. But I can attest from doing two recent blogs on improved biomass stoves and rural electrification, it is not easy to gain access to these figures. The problems are that some classifications of statistics are not updated frequently, you have to pay a premium price to obtain them, or they are mostly based on production and not demand statistics.

That is why I want to congratulate the team at REN21 for publishing a yearly report on the status of renewable energy, with a recently released report for 2010. I got an inside glimpse of this work this year as the author of the chapter on rural renewable energy. So I can tell you the process of assembling all this information every year is not easy. Here is a quote from Eric Martinot who is one of the lead coauthors (along with Janet Sawin) of the report.

“I am pleased to announce publication of the REN21 Renewables 2010 Global Status Report. The report is a unique global synthesis of markets, investment, industry, policy, and rural energy, produced annually since 2005. This year the report is the best ever!This year's edition highlights many trends and milestones. One thing that stands out is how renewables are achieving parity with fossil fuels in several respects, including total investment in new power capacity and total amount of capacity added. And most growth rates in 2009 kept to 5-year and even decade-long averages. …You can download the full report from the REN21 website (including press release and other materials).”

What is Rural Electrification: New Technologies and Old Definitions?

What is rural electrification? This definitioin appears simple but it is becoming more and more complicated as new devices and systems are developed that provide various levels of electricity service.

Grid Rural Electrification,Vietnam: Photo WB Hanoi

With the exception of flashlights, historically the main source of electricity has come from national or local grid systems.  National grid systems are fairly well know.  Local or isolated grid systems are generally based on either microhydro or diesel generators, and the distribution system does not extend beyond a local area such as a town or group of towns.   Then along came the first generation of household offgrid technologies such as solar home systems that were developed and marketed to consumers.  These systems involve photovoltaic panel or panels coupled with a battery for a single home.  Recently this has been followed by new small household lighting systems. Often unrecongnized, for many years rural people have used car or motorcycle batteries for basic television and household lighting. Today there are even some new developments such as thermo-electric devices that can turn heat into small amounts of electricity when attached to household cooking stoves.  These technologies are still in the early stages of marketing and development.

Amid this wide variety of new systems and devices, the cost and level of service is quite different among these various types of systems . As you move from those that already have grid service to offgrid technologies, the cost increases per kilowatt hour and the service decreases.  Of course the most desirable electricity service is from the grid, but there are well known constraints to extending grid electricity to remote areas in developing countries. The constraints include high costs involved in reaching remote areas and lack of local capacity to use much electricity.  In such situations offgrid technologies often are less expensive than the grid in remote areas or for specialized uses. For those that are not so familiar with the hierarchy of these technologies, I will provide a brief description of typical service levels and the main benefits that can be supported by them (see table below the break).

Energy Poverty Continued: A Narrative from Andrew Barnett

I have received a rather long comment from Andrew Barnett from The Policy Practice and I thought it would be good to include his insights on energy poverty as a main post. The slightly revised text below is from Andrew Barnett.

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A Narrative on Energy Poverty by Andrew Barnett

Fuel Collection Bangalore, India Photo by D. Barnes

A new generation of people has recently become interested in “Energy Access” and I am frequently asked what did we learn over the past 30 years. What follows is my attempt to put together a “simple narrative” about what we know about energy poverty.

It is probably useful to start by making the distinction between primary energy, energy conversion technology, and the idea of “useful energy” or (better) modern energy services. So the issue is how to enable poor people to gain greater use of the services made possible by modern energy. This is the crucial insight that enables “decision makers” to see the problems involved. Namely, the problems involve an increase in the supply of modern energy forms and great access to and utilization of energy conversion technology. This leads on to to issues of energy conversion efficiency, and the ability of people to pay for the services. It has been said for a long time that poor people do not lack access to energy (they are sweltering in the heat from the sun and many have biomass all around them). What they lack is the means to make it useful to them. This usually involves the expenditure of capital on equipment to turn biomass and the sun’s energy into energy that is useful for them. Energy poverty no doubt results from money poverty and is largely about the inability to pay for modern energy services. Focusing on energy use at the outset focuses attention on the demand side of the problem.

Continue below....

The Concept of Energy Poverty

The existence of energy poverty today is quite well accepted around the world. In fact alleviating energy poverty is a goal of many development organizations that deal with energy issues for developing countries.

Migrant Workers Cooking-India: Photo WB/Curt Carnemark

When it comes to defining energy poverty these organizations assume the position that many take in appreciating good art--"they know it when they see it." There is much talk about energy poverty but not much action in terms of measuring it.

There is a good reason the people avoid defining energy poverty. It just is very thorny to define. There even was a time not too long ago that development specialists refrained from using the term. One can ask several different questions concerning the definition of energy poverty. Is energy poverty the same as income poverty? Is energy poverty based on access to energy services such as cooking, communications or lighting? Or is it based on quantities of energy that people use? These questions have generated several different approaches to measuring energy poverty.

Small Photovoltaic Lighting Systems: Niche or Not

The small technologies such as solar lanterns and small lights have always been a challenge to promote under development programs.

Solar Lantern in India

The wind up radio, which is now in the mainstream market for developed countries, was originally introduced as a possibility to improve communication in developing countries. Except for emergency situations such as Haiti, it is not a staple product for international donor programs because such products are now readily available in the marketplace, sold through large chains, retail stores and shops at retail prices.

The question is will small photovoltaic lighting systems have a similar fate? In part to answer this question there is a recent report that has been published by GTZ with the long title, What difference can a PicoPV system make? Early findings on small Photovoltaic systems - an emerging low cost energy technology for developing countries.  Here is the link. That must be a literal German translation of the title, but my preference given the content of the report would be something like The Role of Micro-Photovoltaic Lighting Systems in Developing Countries. But admittedly that is more boring.

Rural Energy Subsidies: “It's Déjà Vu All Over Again”

By Doug Barnes

I have noticed that there has been quite a bit of material circulating recently on energy access and subsidies.  The World Bank has prepared

Cooking with Ecofogon Stove, Nicaragua
Photo: PROLEÑA/Nicaragua

a background paper that will be published soon, and it is quite good. However, in reading this paper and other related material, I almost felt I had read it before—a kind of déjà vu.  So in this period when everybody is asking "Where is my bailout?" it seems a good time to review the justifications and implementation challenges for energy subsidies.

Jonathan Halpern and I had written both a paper and a short note on this subject about 10 years ago at a time when there were strong anti-subsidy sentiments in many development agencies. This blog contains a summary of that paper on energy subsidies published in 2000. So go to the original paper and read it, or read on. Or read on and then go to the paper! This work hopefully has withstood the test of time, but you can be the judge.

Why should we examine the role of energy subsidies for access to energy?  The answer seems obvious.  Energy policies that have the purpose of alleviating poverty must in some way bring down the costs of safe, clean, reliable energy services to make them more affordable. Low-income households often lack access to or cannot afford the initial costs of “modern” energy services. A good subsidy scheme is one that enhances access for the poor while sustaining incentives for efficient delivery of energy services without significant distortions in energy markets. But that is not all: the subsidy scheme must also be within the financial and human resource constraints of the government. This is quite a balancing act.


Much more below the break....