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With at least a billion people worldwide living without electricity, and many millions more held back by blackouts and high costs, improving energy access is increasingly a top priority for governments, business leaders, and citizens across the developing world. With Power Africa, SE4All, and the inclusion of a universal energy access target in the post-2015 Sustainable Development Goals, the international community is responding to these growing demands. It is thus imperative that modern energy targets and indicators are set in a meaningful and practical way.
Energy access is necessary for improved cooking, heating, lighting, refrigeration, communications, and more that are all directly related to important health, education, and income goals. However, success for any broad goal requires setting the right specific target with which to measure progress. Unlike standardized measures with a 0-1 answer like infant mortality or primary school enrollment, energy access is not as simple as having a power line connected to a household. Modern energy access entails less a physical connection to a grid than the availability of reliable and affordable energy services necessary to sustain a dignified life. Current definitions of access, such as the IEA’s 100kWh/person/year threshold, would only provide enough electricity to power a single 60W lightbulb. This far understates the amount of electricity and energy services that a growing class of the world’s poor expect and demand.
Any meaningful energy access goals, in the SDGs and elsewhere, must reflect both this latent demand for modern energy and an allowance for future growth to that level. And because the push for energy access involves long-term infrastructure investments, aiming too low has potentially harmful consequences. This working group brings together the latest research and policy expertise to recommend a set of improved targets, indicators, and policies to ensure this moment for universal energy access is not wasted.
The first working group meeting was convened on March 17, 2015, in Washington, DC.
Working Group Members (affiliations listed for identification purposes only)
Mimi Alemayehou, Black Rhino Group
Todd Moss, CGD
Nicolina Angelou, ESMAP, World Bank Yaw Ansu, Africa Center for Economic Transformation Morgan Bazilian, World Bank Yael Borofsky, MIT Steve Brick, Clean Air Task Force Jonah Busch, CGD Afua Djimi, Black Rhino Group Emily Huie, ONE Campaign Ben Leo , CGD Vijay Modi, Columbia University Scott Morris, CGD Philippe Niyongabo, African Union Ted Nordhaus, Breakthrough Institute Queen Nworisara-Quinn, Kupanda Capital Alex Rugamba, African Development Bank Kathryn Russell, ONE Campaign Bill Savedoff, CGD Kartikeya Singh, Fletcher School, Tufts University Peter Teague, Breakthrough Institute Johannes Urpelainen, Columbia University Catherine Wolfram, Energy Institute at Haas, UC Berkeley Davida Wood, World Resources Institute
One of the most impressive things about Power Africa is that it has two clear and measurable goals: 30 gigawatts of new generation capacity and 60 million new connections for homes and businesses.
One of the least impressive things has been—at least up to now—how the government has been measuring what counts as a “new connection.” Some three-quarters of the Power Africa-affiliated connections so far have been solar lanterns or small single-household systems with very limited capacity. These tiny electrical systems that charge a cell phone or run a few lights are better than costly and dirty kerosene or old car batteries. And they’re far better than nothing. But they’re also not exactly what most people—or congressional authors of the Electrify Africa Act—would consider an electricity connection.
That’s why we should welcome Power Africa 2.0 and its emphasis on higher power solutions. As part of this, the team will soon halt counting solar lanterns as new connections, capping the total at 12 million or 20 percent of the target. (They’ll still track lantern distribution, but not as part of the connections goal.) This all fits with Power Africa’s sensible evolution toward encouraging a range of higher capacity home systems, physical connections to national grids, and the development of minigrids.
This positive shift is important because larger output electricity systems become necessary as consumers move up the energy ladder to higher power appliances (like my favorite refrigerator). Even more importantly, if people expect to use electricity for what economists call productive uses—and what regular people call jobs—they need a lot more than what small systems can currently deliver. And if African governments want to create prosperous economies that compete globally, they will need not just slightly more efficient small systems, but high-energy systems that provide orders of magnitude more energy.
Now that the US government is moving toward fixing this connection measurement problem and raising its energy ambitions, it should also use its influence to encourage others to aim higher on energy targets. In particular, the World Bank, the UN, and others still use the International Energy Agency (IEA) standard for energy access, which is a paltry 50 kWh per person per year in rural areas and 100 kWh for people living in cities. That’s also the yardstick being used to judge success against the UN’s SDG7 to achieve universal access to modern energy by 2030.
As a CGD Energy Access Targets Working Group concluded, this level of energy is more accurately an “extreme energy poverty line” than anything close to modern energy access. The working group called on the world to raise the bar.
Bravo to Power Africa 2.0 for moving in a positive direction that’s more reflective of how energy contributes to economic development over time. Let’s see the other energy policy actors step up too.
Lant Pritchett is again attacking “kinky development” for skewing goals toward minimal provision for the poor rather than broader economic development. Lant’s rant is that defining the poverty line at $1 per day is “egregiously paternalistic” if true poverty is really closer to $10 or maybe $15 per day. He worries about the wrong goal leading to all kinds of misplaced resources.
Lant’s critique resonates in the energy field, too. Energy wonks will gather in New York City on April 3 for the third annual Sustainable Energy for All (SE4All) forum to discuss progress on SDG7, whose aim is “By 2030, [to] ensure universal access to affordable, reliable and modern energy services.” The target is wonderful. The details are where this gets a little kinky.
We’ll start with the positive, which is right there in the MTF’s title: it’s multi-tier. This is much better than a binary 0-1 of energy access, such as counting physical connections or the current IEA standard which defines “modern energy access” as an estimate of the percentage of people with annual consumption above 100 kWh/person for urbanites and 50kWh for rural citizens. The MTF is also tracking attributes of energy delivery such as reliability and affordability. Most importantly, the MTF is a vast improvement because the tiers imply moving up an energy ladder. The MTF suggests that getting a lightbulb is not a simple goal itself, but rather one step up toward higher energy services.
Despite these improvements, there are (at least) three big shortcomings of the MTF for household electricity.
The middle tiers are misleadingly low. The tiers are deceptive in scale. Tier 3, for example, is right in the middle and labeled “medium power,” but is nothing of the sort. Reaching Tier 3 is equivalent to 73 kWh/person/year (calculated at (1 kWh/day x 365 days)/5 people per household). But 73 kWh/year is barely enough to power lights and a phone charger, while a single family refrigerator needs 300-500 kWh. Practical Action, a well-regarded NGO, is pushing for Tier 3 to be the global minimum standard for rural electrification, while acknowledging this is not even enough to meet three-quarters of the household needs of the rural poor (see graphic).
Indeed, elsewhere, the World Bank has called this low level of energy “subsistence consumption,” a much more appropriate label. Our 2016 CGD report on energy access, More than a Lightbulb, proposed re-naming the IEA’s 100kWh threshold as an “extreme energy poverty line.” So… Tier 3 is not really medium power in any meaningful way.
The top tier is nowhere near the top—and thus also misleading. Tier 5, defined as “very high power” and the highest level of access in the MTF, is a minimum of about 600 kWh/person/year. Yet, there is no high-income country in the world—in the entire world—with average energy consumption below 5,000 kWh/person/year. The US average is 13,000 kWh. The 600kWh level is thus orders of magnitude below anything approaching the energy needs of a person living a high energy modern life and using typical modern appliances, like computers, refrigerators, and air conditioning. Hard to justify that as the top or “very high power.”
Most energy is for industry and commerce. SE4ALL proposes similar multi-tier frameworks for households, “productive engagements” for individuals, and local community facilities. These capture the most visible share of energy use in an economy, yet it’s very partial. If the MTF is going to be the new standard for judging countries against SDG7, then it’s largely divorced from the reality that, in an average country, the vast majority of energy is consumed by industry and commerce. For instance, a cell phone may not need much power to charge and can survive on intermittent power. But the towers and servers that enable the phone to function have huge power requirements and must run 24/7. Furthermore, large volumes of power for the industrial and commercial sectors are a precondition for economic growth and job creation—which is, really, what most countries consider “development.”
Does any of this really matter? Absolutely. Goals influence decisions. If the aim is just to get everyone to 73 kWh per year and declare success, then there’s no problem providing low power home kits to poor people and forget about building a modern energy system to meet future needs. If the goal is just to get households to use a few basic appliances, then there’s no reason to worry about building modern energy systems for industry and commerce. If we only focus on giving a little bit of energy to poor people, then we don’t need to worry about future energy demand or job creation. But none of this seems aligned with the historical record of how energy was accessed in the rest of the world: people moved to cities and towns and power was deployed principally to generate economic activity.
What might be better? Here are two suggestions:
Adjust the tier range to better reflect the energy ladder—or add more tiers. A middle tier should be consistent with the energy usage of middle-income households, while the upper tier should be reflective of modern consumption patterns. More than a Lightbulb proposed defining “basic energy” access as 300kwh/person/year and “modern energy” at least at 1,500 kwh. If the World Bank believes there’s something meaningful and sacrosanct about the five tiers they’ve used, then add one or two more.
Complement the MTF with energy-level country categories. Just as the World Bank does with income thresholds, countries should also have national energy goals that include consumption for the whole economy, including commerce and industry. The Lightbulb report made orders-of-magnitude suggestions:
Extreme low energy (national average of less than 300 kWh per capita per year)
Low energy (300–1,000 kWh)
Middle energy (1,000–5,000 kWh)
High energy (more than 5,000 kWh)
The SE4All Forum will undoubtedly put needed attention on accelerating the path to eliminating energy poverty. And the yeoman’s work of the World Bank’s ESMAP team has inarguably strengthened our toolkit for measuring progress toward that goal. But we should not let a wonky analytical tool mask the role of energy in the development process by setting the bar too low—and too kinky.
In the twelve months to June 2016, nearly 1.3 million Kenyan households were connected to the grid for the first time. This impressive feat pushed Kenya’s national electricity connectivity rate to 55 percent from just 27 percent in 2013, one of the fastest connection increases recorded in the region. These latest connections illustrate the Kenyan government’s commitment to a goal of achieving universal energy access by 2020 (at least as measured by number of connections by Kenya Power and Lighting Corporation (KPLC), the national utility that owns and operates most of the electricity transmission and distribution system).
This is impressive. The jump from 27 percent to 55 percent took Kenya a little over three years. That same achievement took the United States about eight years during the height of the push to expand household electrification.
Now, Kenya aims to move from 55 percent to a ‘near universal’ access rate of 95 percent in just four more years—a leap that took the United States nearly twenty-six years. Yes, the U.S. is larger in size and population, but Kenya’s ambitions are still tremendous. In order to reach its goal, Kenya aims to hit 6.5 million connected households by July 2017, their most ambitious annual connections target yet. As of the end of last month, they are just about halfway there and roughly on track.
All this highlights Kenya as an example of extremely fast progress in electrification. So, what is Kenya’s strategy?
Invest heavily: In 2015, the Kenyan government and KPLC announced the Last Mile Connectivity Project, an initiative to connect one million customers per year. The government has already secured over $600 million from various international donors, and aims to connect over 814,000 households, measured as four million Kenyans, over the next four years.
Promote ‘under grid’ connections: Many Kenyans continue to live ‘under the grid,’ meaning the grid infrastructure is near where they live, but they are not connected. In response, many of Kenya’s connectivity programs, including the Last Mile project, have made an effort to leverage existing infrastructure in order to connect nearby populations as quickly as possible. For example, Phase I of the Last Mile project is focused on connecting under grid households within 600 meters of existing KPLC transformers.
Address demand side constraints: Two major policy adjustments in the last year reflect the government’s awareness of demand-side barriers to access. The government reduced the connection charge by over 50 percent and offered customers the option to pay the charge in installments. KPLC also scrapped a cumbersome application process, which was evidently skewed in favor of literate and wealthier households.
Will Kenya reach 95 percent by 2020? Due to KPLC’s remarkable transparency on progress on household connections, we can follow along in nearly real-time. Check it out, here.
How much energy do the world’s poor need? The current definition of "modern energy access" sets an extremely low bar. A new CGD paper presents five recommendations for a new standard of energy access that would signify meaningful transformation in households and national economies.
Visit the report page for a full interactive version and video.
“Modern energy access” is finally on the international agenda, but the current common definition of 100 kilowatt-hours (kWh) per capita per year is far too low.
To reflect likely demand and historical trends would require measuring energy usage at higher levels, such as 300 and 1,500 kWh per capita per year.