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.

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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.


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Solving Rural Electrification Problems: New Wine in Old Bottles?

Strong institutions, favorable financing, clear service territories, encouraging productive uses, reducing drudgery for women, and local involvement.  Do these all sound like familiar prescriptions for successful rural electrification?

Rural Electrification Administration Advertisement
Source: NRECA

In fact they encompass some of the eight steps to successful rural electrification highlighted in a previous blog. Recently I was doing a bit of research on the United States Rural Electrification Administration (REA) and I came across some interesting quotes that illustrate many of these points—some from the 1930s no less.

Before plunging into the quotes, some salient facts for those that do not live in the US—or for those living in urban areas in the US! The United States beginning in the 1930s began implementing a new rural electrification program as part of Roosevelt’s New Deal that was based on a newly created government agency called the Rural Electrification Administration. This government agency was created not to carry out rural electrification projects, but to support their implementation through electricity distribution companies called rural electric cooperatives. These cooperatives were and still are private, independent electric utilities anchored firmly in the communities that they serve. Today there are more than 900 electric cooperatives in the United States providing reliable electricity service to 42 million Americans while maintaining a unique consumer-focused approach to business. For more facts see US Utility Fact Sheet published by the National Rural Electric Cooperative Association.

With this background, it is now time for the quotes which have been paraphrased to provide a better context for understanding them.  

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Promoting Solar Home Systems and Improved Biomass Stoves: A Comparison

Solar PV Adoption by Herders, Qinghai, China
Photo by China REDP Team

Over the past 15 years strategies for solar home system promotion have moved from a niche activity to the mainstream. Recently I have been thinking that there are quite a few similarities in the obstacles that were faced by solar homes system in the early years and those confronting the new improved biomass stoves today. I thought it might be a good time to explore what we have learned over the years, and what lessons might be relevant for scaling up the adoption of improved biomass stoves.

Both solar home systems and improved stoves are used primarily for household energy services such as cooking and lighting. They both provide significant improvements compared to the kerosene lamp or an open fire. Both devices also involve fairly large initial costs that are barely affordable to the majority of populations in developing countries, but the cost to operate them is fairly low. Solar home systems cost on the order of US $200-$300 and the new generation of improved stoves range from US $10 to $70 or more. As the old joke goes “Solar (read that renewable) energy is free, but it ain’t cheap.”

 

Today solar home systems are considered fairly mainstream and adoption levels though still somewhat limited are rising quickly in many countries. With the exception for the older large programs such as china, progress is being made by improved biomass stove programs, but they also have quite a long way to go to be accepted on a large scale in more countries.

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Rural Electrification in Developing Countries by the Numbers

Rural Electrification Lineman Bangladesh
Photo by WB Dhaka

The rural electrification figures in developing countries are pretty well known by now. There are now an estimated 1.5 billion people without electricity in developing countries, and 85 percent of them live in rural areas. However, I am going to give a brief history of the context in which these numbers were compiled. So this post will discuss rural electrification numbers with a twist.

In the early 1990s, several ESMAP energy staff including me were asked to complete a rural energy strategy for the World Bank. One the first things we were asked to do was to find out how many people in the world were without electricity and cooked with biomass fuels. Believe it or not this had never been done in a comprehensive way. This was before the age of instant access to facts and figures over the internet, so it was not an easy task. For the electricity figures we looked at surveys, examined power company annual reports, consulted with those involved in rural electrification projects, and contacted statistical departments in country governments. After well over a year of compiling the data we presented them to our very supportive managers. I remember them saying, “These figures better be right!” Knowing the uneven quality of the sources we were nervously confident. The document was published in 1996 with the title Rural Energy and Development: Improving Energy Supplies for Two Billion People. Yes the answer for data mostly from the early to mid-1990s was two billion people without electricity and coincidentally just over two billion people dependent on biomass fuels.

These figures were widely quoted at the time, but they were not updated annually. Around 2000 the energy group decided that it was time for an update of these figures. I was not directly involved with this effort, but was asked to review the numbers as they collected the information. A new set of figures were published informally in 2002 with the new level of 1.7 billion people without electricity, and most of the progress that had been made during the previous decade was in China. After taking population growth into account this meant that over the previous decade about 1 billion people had gained access to electricity.

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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.

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