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Homes without reliable access to energy such as electricity, heating, cooling, etc.
Energy poverty is lack of access to modern energy services. It refers to the situation of large numbers of people in developing countries and some people in developed countries whose well-being is negatively affected by very low consumption of energy,
use of dirty or polluting fuels, and excessive time spent collecting
fuel to meet basic needs. Today, 759 million people lack access to
consistent electricity and 2.6 billion people use dangerous and
inefficient cooking systems.
It is inversely related to access to modern energy services, although
improving access is only one factor in efforts to reduce energy poverty.
Energy poverty is distinct from fuel poverty, which primarily focuses solely on the issue of affordability.
The term “energy poverty” came into emergence through the publication of Brenda Boardman’s book, Fuel Poverty: From Cold Homes to Affordable Warmth
(1991). Naming the intersection of energy and poverty as “energy
poverty” motivated the need to develop public policy to address energy
poverty and also study its causes, symptoms, and effects in society.
When energy poverty was first introduced in Boardman's book, energy
poverty was described as not having enough power to heat and cool homes.
Today, energy poverty is understood to be the result of complex
systemic inequalities which create barriers to access modern energy at
an affordable price. Energy poverty is challenging to measure and thus
analyze because it is privately experienced within households, specific
to cultural contexts, and dynamically changes depending on the time and
space.
According to the Energy Poverty Action initiative of the World Economic Forum,
"Access to energy is fundamental to improving quality of life and is a
key imperative for economic development. In the developing world, energy
poverty is still rife." As a result of this situation, the United Nations (UN) launched the Sustainable Energy for All Initiative and designated 2012 as the International Year for Sustainable Energy for All,
which had a major focus on reducing energy poverty. The UN further
recognizes the importance of energy poverty through Goal 7 of its
Sustainable Development Goals to "ensure access to affordable, reliable,
sustainable, and modern energy for all."
Causes
Energy sources
Women gathering firewood for fuel.
Rural areas are predominant in mostly developing countries,
and the rural areas in the countries do not have modern energy
infrastructure. They have heavily relied on traditional biomass such as wood fuel, charcoal, crop residual, wood pellets
and the like. Because lack of modern energy infrastructure like power
plants, transmission lines, underground pipelines to deliver energy
resources such as natural gas, petroleum that need high or cutting-edge
technologies and extremely high upfront costs, which are beyond their
financial and technological capacity. Although some developing countries
like BRIC
have reached close to the energy-related technological level of
developed countries and have financial power, still most developing
countries are dominated by traditional biomass. According to the
International Energy Agency IEA,
"use of traditional biomass will decrease in many countries, but is
likely to increase in South Asia and sub-Saharan Africa alongside
population growth."
Energy poverty projects involving renewable sources can also make a positive contribution to low-carbon development strategies.
Energy price increases and poverty
Energy
tariff increases are often important for environmental and fiscal
reasons – though they can at times increase levels of household poverty.
A 2016 study assesses the expected poverty and distributional effects
of an energy price reform – in the context of Armenia;
it estimates that a large natural gas tariff increase of about 40%
contributed to an estimated 8% of households to substitute natural gas
mainly with wood as their source of heating - and it also pushed an
estimated 2.8% of households into poverty - i.e. below the national
poverty line. This study also outlines the methodological and
statistical assumptions and constraints that arise in estimating causal
effects of energy reforms on household poverty, and also discusses
possible effects of such reforms on non-monetary human welfare that is
more difficult to measure statistically.
A study 'High Energy', by Oldham.Jules,(2011) Scottish Council for
Single Homeless, showed the difference between a new tenancy succeeding
or failing when people moved on from homelessness, as a result of the
new tenant having a) utilities in place before moving in, b) an
understanding of payment options and meter types, and c) accessing the
correct tariff to suit their budget and financial needs.
Energy Ladder
The ‘Energy Ladder’: What energy sources do people on different incomes rely on?
An energy ladder shows the improvement of energy use corresponding to
an increase in the household income. Basically, as income increases,
the energy types used by households would be cleaner and more efficient,
but more expensive as moving from traditional biomass to electricity.
"Households at lower levels of income and development tend to be at the
bottom of the energy ladder, using fuel that is cheap and locally
available but not very clean nor efficient. According to the World
Health Organization, over three billion people worldwide are at these
lower rungs, depending on biomass fuels—crop waste, dung, wood, leaves,
etc.—and coal to meet their energy needs. A disproportionate number of
these individuals reside in Asia and Africa: 95% of the population in
Afghanistan uses these fuels, 95% in Chad, 87% in Ghana, 82% in India,
80% in China, and so forth. As incomes rise, we would expect that
households would substitute to higher quality fuel choices. However,
this process has been quite slow. In fact, the World Bank reports that
the use of biomass for all energy sources had remained constant at about
25% since 1975."
Units of Analysis
Domestic energy poverty
Domestic energy poverty refers to a situation where a household does not
have access or cannot afford to have the basic energy or energy
services to achieve day to day living requirements. These requirements
can change from country to country and region to region. The most common
needs are lighting, cooking energy, domestic heating or cooling.
Lack of access to electricity is one indicator of energy poverty.
Other authors consider different categories of energy needs from
"fundamental energy needs" associated to human survival and extremely
poor situations. "Basic energy needs" required for attaining basic
living standards, which includes all the functions in the previous
(cooking, heating and lighting) and, in addition energy to provide basic
services linked to health, education and communications. "Energy needs
for productive uses" when additionally basic energy needs the user
requires energy to make a living; and finally "Energy for recreation",
when the user has fulfilled the previous categories and needs energy for
enjoyment."
Until recently energy poverty definitions took only the minimum energy
quantity required into consideration when defining energy poverty, but a
different school of thought is that not only energy quantity but the
quality and cleanliness of the energy used should be taken into consideration when defining energy poverty.
One such definition reads as:
- "A person is in 'energy poverty' if they do not have access to at least:
- (a) the equivalent of 35 kg LPG for cooking per capita per year from liquid and/or gas fuels or from improved supply of solid fuel sources and improved (efficient and clean) cook stoves
- and
- (b) 120kWh electricity per capita per year for lighting, access to
most basic services (drinking water, communication, improved health
services, education improved services and others) plus some added value
to local production
An 'improved energy source' for cooking is one which requires less
than 4 hours person per week per household to collect fuel, meets the
recommendations WHO
for air quality (maximum concentration of CO of 30 mg/M3 for 24 hours
periods and less than 10 mg/ M3 for periods 8 hours of exposure), and
the overall conversion efficiency is higher than 25%. "
Challenges to defining and measuring energy poverty
Energy
poverty is challenging to define and measure because energy services
cannot be measured concretely and there are no universal standards of
what are considered basic energy services. Energy services are different
ways people use energy like lighting, cooking, space heating,
refrigeration, etc.
Composite Indices
Energy Development Index (EDI)
First introduced in 2004 by the International Energy Agency (IEA), the Energy Development Index (EDI) aims to measure a country’s transition to modern fuels.
It is calculated as the weighted average of four indicators: “1) Per
capita commercial energy consumption as an indicator of the overall
economic development of a country; 2) Per capita consumption of
electricity in the residential sector as a metric of electricity
reliability and customers׳ ability to financially access it; 3) Share of
modern fuels in total residential energy sector consumption to indicate
access to modern cooking fuels; 4) Share of population with access to
electricity.” (The EDI was modeled after the Human Development Index (HDI).)
Because the EDI is calculated as the average of indicators which
measure the quality and quantity of energy services at a national level,
the EDI provides a metric that provides an understanding of the
national level of energy development. At the same time, this means that
the EDI is not well-equipped to describe energy poverty at a household
level.
Multidimensional Energy Poverty Index (MEPI)
Measures
whether an individual is energy poor or rich based on how intensely
they experience energy deprivation. Energy deprivation is categorized by
seven indicators: “access to light, modern cooking fuel, fresh air,
refrigeration, recreation, communication, and space cooling.”
An individual is considered energy poor if they experience a
predetermined number of energy deprivations. The MEPI is calculated by
multiplying the ratio of people identified as energy poor to the total
sample size and the average intensity of energy deprivation of the
energy poor.
Some strengths of the MEPI is that it takes into account the number of
energy poor along with the intensity of their energy poverty. On the
other hand, because it collects data at a household or individual level,
it is harder to understand the broader national context.
Energy Poverty Index (EPI)
Developed
by Mirza and Szirmai in their 2010 study to measure energy poverty in
Pakistan, the Energy Poverty Index (EPI) is calculated by averaging the
energy shortfall and energy inconvenience of a household.
Energy inconvenience is measured through indicators such as: “Frequency
of buying or collecting a source of energy; Distance from household
traveled; Means of transport used; Household member’s involvement in
energy acquisition; Time spent on energy collection per week; Household
health; Children’s involvement in energy collection.” Energy shortfall
is measured as the lack of sufficient energy to meet basic household
needs. This index weighs more heavily the impact of the usability of
energy services rather than its access. Similar to the MEPI, the EPI
collects data at a micro-level which lends to greater understanding of
energy poverty at the household level.
Intersectional issues
Like
other economic justice issues, energy poverty often exacerbates
existing vulnerabilities amongst already vulnerable communities.
Children gathering firewood.
Gender
In
developing countries, women and girls health, educational, and career
opportunities are significantly affected by energy because they are
usually responsible for providing the primary energy for households.
Women and girls spend significant amount of time looking for fuel
sources like wood, paraffin, dung, etc. leaving them less time to pursue
education, leisure, and their careers. Additionally, using biomass as
fuel for heating and cooking disproportionately affects women and
children as they are the primary family members responsible for cooking
and other domestic activities within the home. Being more vulnerable to
indoor air pollution from burning biomass, 85% of the 2 million deaths
from indoor air pollution are attributed to women and children.
In developed countries, women are more vulnerable to experiencing
energy poverty because of their relatively low income compared to the
high cost of energy services. For example, women-headed households made
up 38% of the 5.6 million French households who were unable to
adequately heat their homes. Older women are particularly more
vulnerable to experiencing energy poverty because of structural gender
inequalities in financial resources and ability to invest in energy
saving strategies.
Education
With
many dimensions of poverty, education is a very powerful agent for
mitigating the effects of energy poverty. Limited electricity access
affects students’ quality of education because it can limit the amount
of time students can study by not having reliable energy access to study
after sunset.
Additionally, having consistent access to energy means that girl
children, who are usually responsible for collecting fuel for their
household, have more time to focus on their studies and attend school.
90 percent of children in sub-Saharan Africa go to primary
schools that lack electricity. In Burundi and Guinea only 2% of schools
are electrified, while in DR Congo there is only 8% school
electrification for a population of 75.5 million (43% of whom are under
14 years). In the DRC alone, by these statistics, there are almost 30
million children attending school without power.
Education is a key component in growing human capital which in
turn facilitates economic growth by enabling people to be more
productive workers in the economy.
As developing nations accumulate more capital, they can invest in
building modern energy services while households gain more options to
pursue modern energy sources and alleviate energy poverty.
Health
Due to
traditional gender roles, women are generally responsible to gathering
traditional biomass for energy. Women also spend much time cooking in a
kitchen. Spending significant time harvesting energy resources means
women have less time to devote to other activities, and the physically
straining labor brings chronic fatigue to women. Moreover, women and
children, who stick around their mothers to help with domestic chores,
respectively, are in danger of long-term exposure to indoor air
pollution caused by burning traditional biomass fuels. During
combustion, carbon monoxide, particulates, benzene, and the likes
threaten their health. As a result, many women and children suffer from
acute respiratory infections, lung cancer, asthma, and other diseases.
"The health consequences of using biomass in an unsustainable way are
staggering. According to the World Health Organization,
exposure to indoor air pollution is responsible for the nearly two
million excess deaths, primarily women and children, from cancer,
respiratory infections and lung diseases and for four percent of the
global burden of disease. In relative terms, deaths related to biomass
pollution kill more people than malaria (1.2 million) and tuberculosis
(1.6 million) each year around the world."
Another connection between energy poverty and health is that
households who are energy poor are more likely to use traditional
biomass such as wood and cow dung to fulfill their energy needs.
However, burning wood and cow dung leads to incomplete combustion and
releases black carbon into the atmosphere. Black carbon may be a health hazard.
Development
"Energy
provides services to meet many basic human needs, particularly heat,
motive power (e.g. water pumps and transport) and light. Business,
industry, commerce and public services such as modern healthcare,
education and communication are highly dependent on access to energy
services. Indeed, there is a direct relationship between the absence of
adequate energy services and many poverty indicators such as infant
mortality, illiteracy, life expectancy and total fertility rate.
Inadequate access to energy also exacerbates rapid urbanization in
developing countries, by driving people to seek better living
conditions. Increasing energy consumption has long been tied directly to
economic growth and improvement in human welfare.
However it is unclear whether increasing energy consumption is a
necessary precondition for economic growth, or vice versa. Although
developed countries are now beginning to decouple their energy
consumption from economic growth (through structural changes and
increases in energy efficiency), there remains a strong direct
relationship between energy consumption and economic development in
developing countries."
Climate Change
In
2018, 70% of greenhouse gas emissions were a result of energy
production and use. With more countries aiming to transition to modern
energy services and provide energy accessibility to more people, there
is a risk that greenhouse gas emissions will increase proportionally.
Historically, 5% of countries account for 67.74% of total emissions and
50% of the lowest-emitting countries produce only 0.74% of total
historic greenhouse gas emissions.
Thus, the distribution, production, and consumption of energy services
is highly unequal and reflects the greater systemic barriers that
prevent people from accessing and using energy services. Additionally,
there is a greater emphasis on developing countries to invest in
renewable sources of energy rather than following the energy development
patterns of developed nations.
Regional Analysis
Energy
poverty is a complex issue that is sensitive to the nuances of the
culture, time, and space of a region. Thus, the terms “Global
North/South” are generalizations and not always sufficient to describe
the nuances of energy poverty, although there are broad trends in how
energy poverty is experienced and mitigated between the Global North and
South.
Global North
Energy
poverty is most commonly discussed as “fuel poverty” in the Global
North where discourse is focused on households' access to energy sources
to heat, cool, and power their homes. Fuel poverty is driven by high
energy costs, low household incomes, and inefficient appliances. (a
global perspective) Additionally, older people are more vulnerable to
experiencing fuel poverty because of their income status and lack of
access to energy-saving technologies. According to the European Fuel Poverty and Energy Efficiency (EPEE), approximately 50-125 million people live in fuel poverty.
Like energy poverty, fuel poverty is hard to define and measure because
of its many nuances. The United Kingdom (UK) and Ireland, are one of
the few countries which have defined fuel poverty to be if 10% of a
household's income is spent on heating/cooling.
Another EPEE project found that 1 in 7 households in Europe were on the
margins of fuel poverty by using three indicators of checking for leaky
roofs, arrears on utility bills, ability to pay for adequate heating,
mold in windows. High energy prices, insufficient insulation in dwellings,
and low incomes contribute to increased vulnerability to fuel poverty.
Climate change adds more pressure as weather events become more cold and
hot, thereby increasing demand for fuel to cool and heat the home. The
ability to provide adequate heating during cold weather has implications
for people’s health as cold weather can be an antagonistic factor to
cardiovascular and respiratory illness.
Global South
Energy
poverty in the Global South is largely driven by a lack of access to
modern energy sources because of poor energy infrastructure, weak energy
service markets, and insufficient household incomes to afford energy
services.
However, recent research suggests that alleviating energy poverty
requires more than building better power grids because there is a
complex web of political, economic, and cultural factors that influence a
region’s ability to transition to modern energy sources.
Energy poverty is strongly linked to many sustainable development goals
because greater energy access enables people to exercise more of their
capabilities. For example: greater access to clean energy for cooking
improves the health of women by reducing the indoor air pollution
associated with burning traditional biomasses for cooking; farmers can
find better prices for their crops using telecommunication networks;
people have more time to pursue leisure and other activities which can
increase household income from the time saved from looking for firewood
and other traditional biomasses, etc.
Because of the impact of energy poverty in sustainable development,
energy poverty is largely seen through the lens of another avenue in
which to promote sustainable development in regions within the Global
South.
Africa
One of
Africa’s unique challenges with energy poverty is its rapid urbanization
and booming urban centers. Based on urbanization trends in Asia, there
has been precedent that urbanization led to broader transitions to
modern energy services.
However, access to modern energy services in cities is predicated by an
increase in income, which is difficult to find in the economies of many
African cities. This has led to only 25% of the Africans living in
urban centers to have electricity access. Furthermore, as Africa’s
population increases access to energy has not increased proportionally.
Between 1970-1990, only 50 million people gained access to electricity
against a population gain of 150 million. The largest barriers people in
urban centers face in accessing energy is the huge cost compared to
their relatively low incomes. The urban poor spend 10-30% of their
income on energy, whereas the non-poor spend only 5-7% of their income.
Addressing energy poverty
Energy is important for not only economic development but also public health. In developing countries, governments should make efforts on reducing energy poverty that have negative impacts on economic development and public health.
The number of people who currently use modern energy should increase as
the developing world governments take actions to reduce social costs and to increase social benefits
by gradually spreading modern energy to their people in rural areas.
However, the developing world governments have been experiencing
difficulties in promoting the distributions of modern energy like
electricity. In order to build energy infrastructure that generate and
deliver electricity to each household, astronomical amount of money are
first invested. And lack of high technologies needed for modern energy
development have kept the developing countries from accessing modern
energy. Such circumstances are huge hurdles; as a result, it is
difficult that the developing countries governments participate in
effective development of energy without external aids. International
cooperation is necessary for framing developing countries' stable future
energy infrastructure and institutions. Although their energy situation
have not been improved much over the past decades, current
international aids are playing an important role in reducing the gap
between developing and developed countries associated with the use of
modern energy. With the international aids, it will take less time to
reduce the gap when comparing to nonexistence of international
cooperation.
The World Bank says that financial help should not be general fossil fuel subsidies, but should instead be targeted to those in need.
International efforts
China
and India which account for about one third of the global population
have booming economies, and other developing nations show similar trends
in rapid economic and population growth. As a result of modernization
and industrialization, energy demand for modern energy sources also
grows. One challenge for developing nations is to support the growing
energy needs of their growing populations by expanding their energy
infrastructure. Without intentional policy-making and action, more
people in developing countries will face extreme difficulties in
accessing modern energy services.
International development agencies intervention methods have not
been entirely successful. "International cooperation needs to be shaped
around a small number of key elements that are all familiar to energy
policy, such as institutional support, capacity development, support for
national and local energy plans, and strong links to utility/public
sector leadership. Africa has all the human and material resources to
end poverty but is poor in using those resources for the benefit of its
people. This includes national and international institutions as well as
the ability to deploy technologies, absorb and disseminate financing,
provide transparent regulation, introduce systems of peer review, and
share and monitor relevant information and data."
European Union
There is an increasing focus on energy poverty in the European Union, where in 2013 its European Economic and Social Committee
formed an official opinion on the matter recommending Europe focus on
energy poverty indicators, analysis of energy poverty, considering an
energy solidarity fund, analyzing member states' energy policy in
economic terms, and a consumer energy information campaign.
In 2016, it was reported how several million people in Spain live in
conditions of energy poverty. These conditions have led to a few deaths
and public anger at the electricity suppliers' artificial and "absurd
pricing structure" to increase their profits.
In 2017, poor households of Cyprus were found to live in low indoor
thermal quality, i.e. their average indoor air temperatures were outside
the accepted limits of the comfort zone for the island, and their
heating energy consumption was found to be lower than the country's
average for the clusters characterized by high and partial deprivation.
This is because low income households cannot afford to use the required
energy to achieve and maintain the indoor thermal requirements.
Global Environmental Facility
"In
1991, the World Bank Group, international financial institution that
provides loans to developing countries for capital programs, established
the Global Environmental Facility
(GEF) to address global environmental issues in partnership with
international institutions, private sector, etc., especially by
providing funds to developing countries’ all kinds of projects. The GEF
provides grants to developing countries and countries with economies in
transition for projects related to biodiversity, climate change, international waters, land degradation, the ozone layer, and persistent organic pollutants.
These projects benefit the global environment, linking local, national,
and global environmental challenges and promoting sustainable
livelihoods. GEF has allocated $10 billion, supplemented by more than
$47 billion in cofinancing, for more than 2,800 projects in more than
168 developing countries and countries with economies in transition.
Through its Small Grants Programme (SGP), the GEF has also made more
than 13,000 small grants directly to civil society and community-based
organizations, totalling $634 million.
The GEF partnership includes 10 agencies: the UN Development Programme;
the UN Environment Programme; the World Bank; the UN Food and
Agriculture Organization; the UN Industrial Development Organization;
the African Development Bank; the Asian Development Bank; the European
Bank for Reconstruction and Development; the Inter-American Development
Bank; and the International Fund for Agricultural Development. The
Scientific and Technical Advisory Panel provides technical and
scientific advice on the GEF's policies and projects."
Climate Investment Funds
"The Climate Investment Funds
(CIF) comprises two Trust Funds, each with a specific scope and
objective and its own governance structure: the Clean Technology Fund
(CTF) and the Strategic Climate Fund (SCF). The CTF promotes investments
to initiate a shift towards clean technologies. The CTF seeks to fill a
gap in the international architecture for development finance available
at more concessional rates than standard terms used by the Multilateral
Development Banks (MDBs) and at a scale necessary to help provide
incentives to developing countries to integrate nationally appropriate
mitigation actions into sustainable development plans and investment
decisions. The SCF serves as an overarching fund to support targeted
programs with dedicated funding to pilot new approaches with potential
for scaled-up, transformational action aimed at a specific climate
change challenge or sectoral response. One of SCF target programs is the
Program for Scaling-Up Renewable Energy in Low Income Countries (SREP),
approved in May 2009, and is aimed at demonstrating the economic,
social and environmental viability of low carbon development pathways in
the energy sector by creating new economic opportunities and increasing
energy access through the use of renewable energy."
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