The Household Benefits of Lighting with Electricity: Consumer Surplus Explained

Figure 1. Consumer Surplus for Lighting

(Graphic: Doug Barnes)

By Doug Barnes

The concept of consumer surplus in measuring the benefits of rural electrification continues to be misunderstood by many people. In this posting, I try to address some of those misperceptions. The main point is that consumer surplus is really a shortcut way to measure social and economic benefits. People purchase kerosene to use in lamps, and then in turn use the light from those lamps for various activities they want to do. Likewise, households purchase electricity to produce light, and this permits an even wider variety of evening activities in the households. People know that electric lights over the short and long term might result in increased education, improved productivity, better ability to host social gatherings and other benefits.

The slightly modified quote below is from Chapter 9 of Electric Power for Rural Growth, and it discusses the evolution of the way benefits of rural electrification have been measured over the years.

Comparative Cooking Costs in Developing Countries

By Douglas Barnes and Keith Openshaw

Kerosene Lamps and Stoves, Hyderabad, India by D. Barnes

Recently we have just reviewed many of programs for improved stoves in developing countries, and we were quite surprised to find that there were few analyses of comparative cooking costs. In the glory days of country energy assessments comparing the cost of cooking to enlighten energy policy makers was very common. Today we stress energy efficiency, combustion, emissions, and carbon. However, if people are going to adopt these stoves the comparative cooking costs are an obvious important place to start. Keith Openshaw who has extensive experience with improved stoves is a coauthor of this posting. 

To revive this lost art, we will explain the steps for calculating comparative cooking. The first step is to assemble the necessary data. This includes:

• Cost of the stove;
• Lifetime of the stove;
• Efficiency of the stove;
• Price of fuels used burned by the stove including wood or other biomass fuels;
• Fuel collection hours for biomass fuels;
• Quantity of fuel consumed in the household per month; and
• Average wage of agricultural workers.

One caveat is that the comparative costs in this analysis are hypothetical because they assume that families cook exclusively with one fuel. Also, we use world market prices and average fuel consumption levels as defined by many different household energy surveys. Thus, these figures can be considered as typical but they do not relate to any one country due to various policies to tax and subsidize household fuels. They at least give us some perspective on the comparative costs of cooking in developing countries.

For much more continue below....

Facing Rural Energy Realities in Bangladesh

Adult Literacy Class, Bangladesh by Shehzad Noorani

People often forget that once Bangladesh was close to being the poorest country on the planet. Things certainly have changed in recent years. Bangladesh has always had policies for open trade that have helped the country become an exporter of manufactured goods, much of which has resulted from allowing investments by multinational firms.  Generally economic growth has been very positive in recent years.

The country also has a very ambitious and successful grid rural electrification program that was modeled after the USA rural electric cooperatives which is considered a “best practice.” Even for those rural households distant from the electricity grid, since 2002 there has been a very successful rural energy fund that is administered by a government bank. This fund along with prominent non-governmental organizations such as Grameen Shakti (part of Grameen Bank) and BRAC have been very active in promoting solar household systems for basic electric lighting and communications services for those out of reach from the grid electricity system. In recent years they also have been expanding to other rural energy technologies such as biogas and improved cookstoves.

Much more below....

Measuring Household Lighting: Survey Design Issues

Lighting: Credit NRECA

In developed countries we take electric lights for granted. We throw a switch, and presto the room lights up from ceiling to floor. But we all have experienced life without electricity during periodic brownouts and blackouts when we get out the candles for several hours. Unfortunately for the approximately 1.5 billion people without electricity in developing countries, there is no switch to throw.

One of the major benefits of rural electrification in developing countries is household lighting. In fact, people often ask my advice on how to measure such benefits. The issues can range from sampling to questionnaire design to sampling techniques. Thus, this is the first in a series of blogs which I will call Survey Design. For the first in this series, I am going to focus on how to measure household lighting. Stay tuned for more on surveys.

Lighting Efficinecy: Credit D. Barnes

People without electricity in developing countries generally light their homes with candles or kerosene wick lamps. The light given from a kerosene lamp is very dim and not great for reading and there is a good reason for this. For measuring lighting in households it is essential to understand that light is measured in lumens. A lumen is a unit used for measuring brightness. A kerosene lamp or a candle gives off about 11 lumens (see chart). By comparison a 100 watt incandescent light bulb provides 1,600 lumens, which is labeled on most packaging. The figure demonstrates that electric lights are much more efficient in converting energy into light. In a measurement study on lighting output it was found that a 100 watt incandescent light bulb typically found in developing countries actually turned out to provide 12.8 kilolumens of light per kilowatt hour compared to 0.1 kilolumens per kilowatt hour for a kerosene lamp. Fluorescent lights are even more efficient.

The reason for the difference between the lumen levels listed on the label on a light bulb package and the testing results has to do with the measurement environment. Actual lumen levels vary based on factors such as reflectors, lenses and location of the light in a room.

Efficiency of Lamps: Credit D. Barnes

How does that have an impact on household lighting? I will demonstrate this by using the results of a household energy survey from Peru. These results are based on actual use of various lighting sources for a national rural sample of 6000 households. As can be seen, the candle and kerosene lamps provide barely enough light to walk around the house. Car Batteries are used for lighting by households with higher incomes but without grid electricity and they provide more light. Due to the efficiency of converting energy into light, electricity from the grid is the best source for household lighting for households who participated in the survey in rural Peru. One may wonder why these household without electricity do not use household photovoltaic systems, but that will be the subject of another post.

For more resources on this topic click the link below. 

Measuring the Benefits of Electricity

It is very difficult to measure the value of electricity in many countries because access to it is virtually universal and prices and connection costs are often subsidized or set by regulatory agencies. One interesting way to estimate the value of services such as electricity is to ask people how much money they would take if the service was taken away from them. This is actually a research method that is used most often in environmental studies.

DC Blizzard of 2010 Photo D. Barnes

I am actually writing about this today because of the Washington DC Blizzard of 2010 this past weekend. After getting 28 inches of snow, our electricity service went out for about 24 hours. This not only meant no light, television, or internet, but our gas furnace requires electricity to operate. With outdoor temperatures below 32 degrees Fahrenheit (0 degrees Celsius, the temperature inside the house quickly dropped to first 60 and then 50 degrees Fahrenheit (15 to 10 Celsius). Our decorative fireplace did not help very much.

To get warm I actually went outside for a walk, and as I was going down the street I passed the site where the electricity lines were down. I saw an electricity truck passing by, and someone on the other side of the street shoveling snow yelled in jest, “Hey I have a few hundred dollar bills if you fix those power lines.” Obviously, his offer was based on the prospect of a cold house without lighting, heating, entertainment, comfort, and communications for just a few days.

In one study that I was involved in we actually asked the people in focus groups how much we would have to pay them to take electricity away from them for 2 years; they would not be permitted to buy generators or other electricity from other sources. They knew this was a hypothetical question, but they gave to some interesting answers. One younger couple gave us a figure of about USD 20,000 which is quite a bit of money in the Philippines 10 years ago. However, one older woman was adamant. She said “I grew up without electricity and you could not pay me anything that would induce me to go without it.” This reminded me of the man with the snow shovel in Washington DC during the blizzard of 2010.

How would you characterize the benefits of rural electrificatoin.  Take the poll below. 

poll by twiigs.com