Energy Poverty Today. Part I: Energy Access

As a member of the FEL-100 community (the Future Energy Leaders program of the World Energy Council) and as a coleader of the Energy Access Taskforce within this community, I recently attended the World Energy Week in Lisbon, to present the taskforce’s activity of this year.

This article is part of a series of three called Energy Poverty Today, presenting in a nutshell the main concepts and challenges of energy poverty. I will discuss about energy access (part I), fuel poverty (part II) and future recommendations to tackle the issues and best practices (part III).

Definition and concepts

Energy Poverty is a concept that has only recently become an important topic on the public agenda in Romania. Nonetheless, the issue has been addressed at global level over the past decades.

The most common definition of energy poverty refers to a lack of access to modern energy services. Though apparently simple, the definition is somewhat confusing, especially when applied to people in the developed regions of the world. It is therefore important to distinguish and tackle separately the two main issues inherent to the concept of energy poverty: energy access and fuel poverty.

Energy access designates the lack of physical connection to the energy grids (centralized or decentralized), hence the lack of infrastructure that ensures energy access – in effect, electricity access in the first place.

Although one may say this is the most important problem and perhaps the only real one regarding energy poverty, energy access is actually only part of the issue. Fuel poverty represents the situation of not being able to afford energy services and/or to keep adequately warm at affordable prices.

Energy Poverty Effects

The real effects of energy poverty (regardless whether energy access or fuel poverty) are hard to quantify and measure. However, some obvious aspects can be observed.

The most common effects are related to social marginalization, health conditions caused by insufficient heating or improper cooking conditions, psychological problems, significantly lower educational accomplishment and higher unemployment rate.

Fuel poverty adds a “cycle of debt” issue (that is, indebtedness resulting from unaffordable energy costs and the effort to avoid disconnection), penalties and grid disconnection (in some countries, bad debtors are blacklisted for future renting or buying) or energy theft, which involves physical security risks and multiple law violations.

Energy access around the world

According to a recent IEA Report on Energy Access, 1.1 billion people around the world lacked electricity access in 2016. Disheartening as this may be, things have actually been improving, considering that in 2000 the number was 1.7 billion. [1]

Moreover, the IEA foresees that the number will keep decreasing, so that by 2030 the number of people without electricity access will fall to 674 million, mainly on account of efforts in India towards universal electricity access.

Although energy access issues can be observed in most of the world, the worst situation is in Africa, followed by Southern Asia and South America. The sub-Saharan regions are the most affected, with an average of merely 43% energy access (some countries in Central Africa having an energy access rate of only 25%). [1]

The causes of this situation are multiple and diverse, but they all come down to the low income levels that don’t attract investors (in conjunction with the large distance between the grids and the communities without energy access). On top of this, corruption and violent conflicts are also significant reasons that discourage investments in the region.

Moreover, what could have been a major business opportunity in such a situation, is actually an even greater challenge: rapid population growth.

Poorly targeted or poorly implemented policies and also a lack of local know-how for complex projects (which translates into more costs for investors) complete the desolated picture of energy access in most of the regions of Africa.

An interesting fact mentioned by the recent IEA Report is that almost all those that gained electricity access in the past 16 years (about 600 mil people) are currently using electricity generated in fossil fuel-based generation units. This is not encouraging in terms of clean energy use. For this reason too, investment in off-grid/mini-grid systems have accelerated in the past years and the increasing trend is expected to be kept, reaching no less than 60% of new access by 2030. [1]

Probably the most significant political and diplomatic measure taken for energy access at global level happened in 2015, when 193 countries adopted a common sustainable development goal to ensure access to affordable, reliable and modern energy services for everyone by 2030 – as part of the UN Sustainable Development Goals project.

The same IEA report indicates that the goal of bringing electricity to all by 2030, as committed to back in 2015, is indeed achievable, provided that the level of annual investment will double from the current level of about $52 billion.

Needless to say, universal energy access is vital and will bring outstanding improvements for those in need, will boost their countries’ economies (tourism and manufacturing, just to name a couple of sectors), while significantly decreasing health issues related to household air pollution and insufficient warming.

Energy access in Europe and Romania

In Europe, things are a bit different, because electricity grid access is not such a major issue as in other regions of the world, and can easily be categorized as a marginal problem. Still, a lot of European countries deal with affordability problems – which is addressed in the second part of this series.

The EU does not have a significant problem of physical access to the electricity grid and this is the reason why, for instance, the World Bank or Index Mundi, have in their statistics a 100% electricity access rate.

But given that the number of EU households yet to be connected to grid is low, the efforts done to bridge the gap of the last percent point are significant. All in all, the EU rate of electricity access is very high, mostly due to a relatively developed economy in the region – a process accelerated for the East European countries especially after joining the EU.

Despite that, there is still a part of the population which has no access to the grid. In Romania, for example, studies show that tens of thousand (recent studies talk about around 30,000, while the 2016 Romanian Energy Strategy indicates an even higher number) households are still not connected to the electricity network, out of a total of 7.18 million points of delivery.

Probably the first real information about energy access in Romania dates since 2006 (almost 68.000 households were out of the grid, based on the official documents at that time), when a Government decision set a somewhat simple action plan: where possible, the localities will be connected to the electricity grid, while for remote settlements off-grid solutions will be taken into consideration.

A few years later, in 2012, a Governmental decision on tackling the energy access issue, in Romania, was submitted for public debate (back then, the central authorities mentioned an increased number, of almost 99.000 points of deliver, not connected to the grid). Although not mentioned the source of this increase, it would have been important to understand the different figure (I presume a different counting methodology is the source of the mismatch – judging by number of localities and not by the number of actual points of delivery, for instance). Unfortunately, the decision was never approved. [2]

PART II – Fuel Poverty

PART III – Best practices and recommendations

[1] IEA 2017, Special Report: Energy Access Outlook


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