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New CGD Report Calls for Clearer, More Ambitious Energy Access Targets

How much energy do people need to rise out of subsistence poverty? What do we mean by the phrase ‘modern levels of energy consumption?’ The answers to these questions have important consequences not just for human development, but also climate change, infrastructure investment, and governance.

Fortunately, this complex discourse is gaining coherence. To wit: the Center for Global Development’s (CGD) latest policy brief "More Than a Lightbulb: Five Recommendations to Make Modern Energy Access Meaningful for People and Prosperity." The report explores important questions relating to the definition of energy access, the tools used to measure it, and the policy implications that come with it. "More Than a Lightbulb" is the product of conversations among the Energy Access Targets Working Group, which in addition to CGD includes representatives from the World Bank, the ONE Campaign, the Clean Air Task Force, the African Development Bank, the Breakthrough Institute, and many others. CGD released a short video explainer along with the paper:

 

The CGD brief is just the latest promising development towards a better understanding of energy for human development. The recent shift toward addressing energy as a development goal, with the UN Sustainable Development Goals (SDG), Sustainable Energy For All (S4EAll), and the Power Africa initiative, is a positive indication of the growing recognition of the role energy and electricity play in development overall. In 2013, Breakthrough and the Consortium for Science, Policy & Outcomes published Our High Energy Planet, which detailed the importance of electrification and high levels of energy consumption in the movement toward a globally modern and equal planet. The discourse shift signals an embrace of this thinking.

However, in order to meaningfully achieve electrification goals, international efforts must seriously reconsider current data, tools and targets in play. CGD’s report shines a light on the present targets and data, and provides constructive solutions for the way forward.

In the overall goal of achieving sustainable development, the energy access targets identified by the International Energy Association (IEA) are largely insufficient. The IEA’s definition of “modern energy access” is currently 100 kilowatt-hours per person per year (kWh/cap/yr) for urban areas and half that for rural areas, an amount that only allows for “a city dweller to power a single light bulb for five hours per day and charge a mobile phone.” While this amount of energy might improve life in the short-term, it does little to guarantee upward mobility or to secure greater opportunity access. As such, CGD recommends re-labeling this current threshold as the “extreme energy poverty” line. Not only would the new label be a more accurate representation, but it might also encourage countries and international development banks to invest more in electrification to raise their populations above it.

In the same vein of improving the way data is represented, CGD identified a pretty muddled landscape of data collection methods, which produce uneven and inaccurate representations of energy access across countries. The World Bank, for example, collects an aggregate that fails to distinguish between household-level consumption and other consumption, such as at the commercial enterprise or industry-level. It “measures electricity consumption per capita by measuring a country’s total power generation, minus estimates of distribution losses, divided by population.” Inequalities between urban and rural areas, or unequal consumption by small pockets of elites also remain hidden. Pooling together household and other types of consumption make it difficult to understand what per-capita household electricity consumption, and consequently, the life of an average citizen, look like.

Though it’s somehow often ignored in ongoing conversations about how to electrify poor countries today, we actually have lots of success stories in the recent and distant past. Countries as diverse as Indonesia, Brazil, Tunisia, China, South Korea, and the United States have achieved universal or near-universal electrification and high rates of electricity consumption. Lessons from these case studies, in terms of investment, governance, regulation, and technology, can prove very instructive. (Keep an eye out for more research on universal electrification from Breakthrough in the coming months.)

Arbitrarily low targets and thresholds for energy access discourage countries from investing in the large-scale infrastructure that has traditionally been required to electrify economies to bolster economic growth, and encourages them instead to focus on small-scale energy sources, such as renewable micro-grids.

To illustrate data more accurately, CGD recommends the widespread adoption of the S4EAll Global Tracking Framework, which provides a five-tier system that correlates with the attainment of different levels of energy services. Currently, however, the tiers are communicated ineffectively, e.g. “move from ESMAP Tier 3 to ESMAP Tier 5”. CGD recommends adding the following categorizations in association with the S4EA five-tier system in order to translate the tiers into more graspable terms that resonate with governments and citizens, and will encourage countries to invest in electrification.  

In addition to the extreme energy poverty line, the CGD paper recommends adding the following two measurements:

  • Basic Energy Access at 300 kWh/person/year, which would enable running basic appliances, such as a fan, a shared refrigerator, or a television, that are commonly in demand once families have modest additional incom
  • Modern Energy Access at 1,500 kWh/person/year, a level of consumption consistent with the label “modern” that includes on-demand usage of multiple modern appliances, including air conditioning

And, the categorization of countries as one of the following:

  • Extreme low energy (national average of less than 300 kWh/person/year)
  • Low energy (300–1,000 kWh/person/year)
  • Middle energy (1,000–5,000 kWh/person/year)
  • High energy (greater than 5,000 kWh/person/year)

The incorporation of these new thresholds and the more specific data collection tactics -- such as remote sensing of electric utilities or mobile phone surveys -- into multinational development institution and national government’s monitoring and evaluation schemes are better suited to track and incentivize progress. All of this is in service of establishing a more nuanced, and more appropriate, picture of energy consumption in society.

The report makes the important point of correlating increased energy access with other development outcomes such as health and education. Energy consumption as a development priority exists within a context of broader developments – including, importantly, the empowerment of women. The issue of energy access, as touched on by the report, is a gendered one. Lack of electricity tends to disproportionately affect women and girls who are usually charged with the collection of biomass to use as fuel. “The efficiency gains from electricity access would allow girls more time for education and women to participate in the labor force at higher rates, earning more income and gaining a more empowered position within the household and society,” the CGD report concludes. Countless studies discuss the added benefit, both economically and socially, gained through the incorporation of women into the formal economy. Measuring increased energy access alongside the gender development index will likely yield important insights into the success of the overall development agenda, and the relationship between energy access and human development.