Impact evaluation has gained recognition over the last decade as an essential component of project development. Impact evaluation details how and to what extent policies and project interventions contribute to socioeconomic welfare gains or losses for society. Such evaluations are also important for identifying key lessons for future policies and investments. In the case of modern energy access, the measurement of costs is fairly straightforward. However, measuring the benefits to society is more difficult and might involve implementing national or regional surveys. Past efforts have often underestimated the complex linkages of benefits produced by programs involved in providing electricity and clean cooking energy to rural and other populations without access to modern energy services. Thus, it has often been difficult to balance the costs of program investments in energy access vis-à-vis their benefits.
This study’s main objective is to develop a practical method by which to measure the benefits of rural energy, including both electricity and clean cooking. The methods reviewed in this report involve both formal and informal techniques of data collection, including quantitative and qualitative methods of analysis. The research pays attention to such concepts as quality of life, effects on education, and other key components of social development; that is, it tackles those benefits of modern energy access that traditionally have been difficult to measure, as well as the easier-to-measure benefits.
The concept of consumer surplus in measuring the benefits of rural electrification continues to be misunderstood by many people. In this posting, I try to address some of those misperceptions. The main point is that consumer surplus is really a shortcut way to measure social and economic benefits. People purchase kerosene to use in lamps, and then in turn use the light from those lamps for various activities they want to do. Likewise, households purchase electricity to produce light, and this permits an even wider variety of evening activities in the households. People know that electric lights over the short and long term might result in increased education, improved productivity, better ability to host social gatherings and other benefits.
The slightly modified quote below is from Chapter 9 of Electric Power for Rural Growth, and it discusses the evolution of the way benefits of rural electrification have been measured over the years.
I recently published a new book on the impact of rural electrification in developing countries. Actually it is a revision of an old book. This is the second edition of my first book Electric Power for Rural Growth, published in 1988 based on research during my first job at Resources for the Future. At the time, international donors were having serious doubt about the benefits of rural electrification for developing countries.
This entirely new production of the original book offers important historical information on the state of rural electrification in the 1980s. I have updated the text and titles, and the tables and charts have been revised for clarity. Some material that is no longer relevant has been omitted. I also have added a new chapter that summarizes the development of benefit evaluation methods, along with findings from recent research on the impact of rural electrification for development.
Overall, the issues identified in the 1980s remain extremely relevant today in the context of the new international emphasis on providing modern energy access for all. This includes its social impact and the productive use of electricity for agriculture and small business development. The main countries covered include India, Indonesia and Colombia. Many of the lessons learned from this study have been lost, especially with today's emphasis of providing electricity to those remaining people without service. Although this is a very important, the complementary conditions for rural electrification also should not be forgotten in the rush to provide "electricity for all."
Since the original writing of this book, the development impact of grid electricity on rural households has been the subject of a significant amount of research. I am glad to report that the findings of this early study have been validated for the most part.
Further research still is necessary on subjects like the impact of solar home systems or small lighting systems on socioeconomic development. It is well-known that certain activities cannot be accomplished by relying on the low power levels available through solar home or smaller photovoltaic systems. The question is whether this matters or should such technologies be considered “pre-electrification”—important in their own right but awaiting further expansion of grid electricity systems. These important new questions can only be answered by new research.
In the meantime, I offer this second edition of my impact study of rural electrification. The purposes of this book are to inform the issues in the public policy debate, advance empirical knowledge about the major issues and reach conclusions on the efficacy of various ways to implement rural electrification for development. In the context of new initiatives to promote the expansion of both grid and offgrid electrification, this study with its emphasis on the importance of complementary conditions is probably more important today even than it was over 20 years ago.
A “new” report on rural electrification in Peru demonstrates the usefulness of conducting energy surveys to help with assessing policies for such programs. The usefulness stems from the ability to not only estimate the benefits of rural electrification, but to analyze if the subsidy policies are both effective and well targeted. There are many ways to structure subsidies for rural electrification in developing countries (see previous blog on energy subsidies). Some types of subsidies can be progressive and others well could be regressive. Assessing the appropriativeness type of subsidy generally is difficult to do without energy survey information.
Rural Energy Expenditures by Income Class in Peru in Soles per Month (1 US$ = 3 Soles) Source: Peru National Survey of Rural Energy Use
In developing countries generally people with higher income spend more cash income on energy than those with lower levels of income. This same pattern can be found in Peru as indicated by the figure. It is somewhat expected that electricity and LPG expenditures in rural Peru increase significantly with increases in income as measured by total expenditures. But interestingly even cash expenditures on fuelwood rise with income which indicates that there is even a willingness to pay for what is probably high quality fuelwood. One reason that it is necessary to have quality surveys is to track both the effectiveness and the targeting of subsidies.
What is rural electrification? This definitioin appears simple but it is becoming more and more complicated as new devices and systems are developed that provide various levels of electricity service.
Grid Rural Electrification,Vietnam: Photo WB Hanoi
With the exception of flashlights, historically the main source of electricity has come from national or local grid systems. National grid systems are fairly well know. Local or isolated grid systems are generally based on either microhydro or diesel generators, and the distribution system does not extend beyond a local area such as a town or group of towns. Then along came the first generation of household offgrid technologies such as solar home systems that were developed and marketed to consumers. These systems involve photovoltaic panel or panels coupled with a battery for a single home. Recently this has been followed by new small household lighting systems. Often unrecongnized, for many years rural people have used car or motorcycle batteries for basic television and household lighting. Today there are even some new developments such as thermo-electric devices that can turn heat into small amounts of electricity when attached to household cooking stoves. These technologies are still in the early stages of marketing and development.
Amid this wide variety of new systems and devices, the cost and level of service is quite different among these various types of systems . As you move from those that already have grid service to offgrid technologies, the cost increases per kilowatt hour and the service decreases. Of course the most desirable electricity service is from the grid, but there are well known constraints to extending grid electricity to remote areas in developing countries. The constraints include high costs involved in reaching remote areas and lack of local capacity to use much electricity. In such situations offgrid technologies often are less expensive than the grid in remote areas or for specialized uses. For those that are not so familiar with the hierarchy of these technologies, I will provide a brief description of typical service levels and the main benefits that can be supported by them (see table below the break).
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.
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.
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.
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.
Vietnam Rural Television Viewing: Photo by WB Hanoi
Today most of us take electronic communications for granted. We are tethered to our emails, televisions, and computers. Facebook, Twitter, sports and entertainment all are made possible by a combination of electricity and technology. Does this improve our productivity? The answer is a resounding yes. Does it also make life more complicated? You bet. In fact, sometimes we feel that the world is getting too interconnected. This raises the question about how to value the electronic communication benefits of modern communications, and it is not an easy issue to tackle.
For the 1.6 billion people in this world who do not have access to electricity their electronic communication needs are more basic. People without grid or off the grid electricity often rely on battery powered radios for their communication devices. For people that adopt electricity for the first time, after household lighting the next most commonly purchased electronic device often is a television or a fan. Therefore in this blog, I am going to concentrate on televisions use and their implications for households with and without electricity.
In developed countries we take electric lights for granted. We throw a switch, and presto the room lights up from ceiling to floor. But we all have experienced life without electricity during periodic brownouts and blackouts when we get out the candles for several hours. Unfortunately for the approximately 1.5 billion people without electricity in developing countries, there is no switch to throw.
One of the major benefits of rural electrification in developing countries is household lighting. In fact, people often ask my advice on how to measure such benefits. The issues can range from sampling to questionnaire design to sampling techniques. Thus, this is the first in a series of blogs which I will call Survey Design. For the first in this series, I am going to focus on how to measure household lighting. Stay tuned for more on surveys.
Lighting Efficinecy: Credit D. Barnes
People without electricity in developing countries generally light their homes with candles or kerosene wick lamps. The light given from a kerosene lamp is very dim and not great for reading and there is a good reason for this. For measuring lighting in households it is essential to understand that light is measured in lumens. A lumen is a unit used for measuring brightness. A kerosene lamp or a candle gives off about 11 lumens (see chart). By comparison a 100 watt incandescent light bulb provides 1,600 lumens, which is labeled on most packaging. The figure demonstrates that electric lights are much more efficient in converting energy into light. In a measurement study on lighting output it was found that a 100 watt incandescent light bulb typically found in developing countries actually turned out to provide 12.8 kilolumens of light per kilowatt hour compared to 0.1 kilolumens per kilowatt hour for a kerosene lamp. Fluorescent lights are even more efficient.
The reason for the difference between the lumen levels listed on the label on a light bulb package and the testing results has to do with the measurement environment. Actual lumen levels vary based on factors such as reflectors, lenses and location of the light in a room.
Efficiency of Lamps: Credit D. Barnes
How does that have an impact on household lighting? I will demonstrate this by using the results of a household energy survey from Peru. These results are based on actual use of various lighting sources for a national rural sample of 6000 households. As can be seen, the candle and kerosene lamps provide barely enough light to walk around the house. Car Batteries are used for lighting by households with higher incomes but without grid electricity and they provide more light. Due to the efficiency of converting energy into light, electricity from the grid is the best source for household lighting for households who participated in the survey in rural Peru. One may wonder why these household without electricity do not use household photovoltaic systems, but that will be the subject of another post.
For more resources on this topic click the link below.
It is very difficult to measure the value of electricity in many countries because access to it is virtually universal and prices and connection costs are often subsidized or set by regulatory agencies. One interesting way to estimate the value of services such as electricity is to ask people how much money they would take if the service was taken away from them. This is actually a research method that is used most often in environmental studies.
DC Blizzard of 2010 Photo D. Barnes
I am actually writing about this today because of the Washington DC Blizzard of 2010 this past weekend. After getting 28 inches of snow, our electricity service went out for about 24 hours. This not only meant no light, television, or internet, but our gas furnace requires electricity to operate. With outdoor temperatures below 32 degrees Fahrenheit (0 degrees Celsius, the temperature inside the house quickly dropped to first 60 and then 50 degrees Fahrenheit (15 to 10 Celsius). Our decorative fireplace did not help very much.
To get warm I actually went outside for a walk, and as I was going down the street I passed the site where the electricity lines were down. I saw an electricity truck passing by, and someone on the other side of the street shoveling snow yelled in jest, “Hey I have a few hundred dollar bills if you fix those power lines.” Obviously, his offer was based on the prospect of a cold house without lighting, heating, entertainment, comfort, and communications for just a few days.
In one study that I was involved in we actually asked the people in focus groups how much we would have to pay them to take electricity away from them for 2 years; they would not be permitted to buy generators or other electricity from other sources. They knew this was a hypothetical question, but they gave to some interesting answers. One younger couple gave us a figure of about USD 20,000 which is quite a bit of money in the Philippines 10 years ago. However, one older woman was adamant. She said “I grew up without electricity and you could not pay me anything that would induce me to go without it.” This reminded me of the man with the snow shovel in Washington DC during the blizzard of 2010.
How would you characterize the benefits of rural electrificatoin. Take the poll below.
I am always surprised when people question the benefits of rural electrification programs in developing countries as sometimes happens. The argument goes something like this. People in rural areas cannot afford much more than the amount of electricity required for basic lighting. In addition, there are other investments that may be more worthwhile than electricity such as education, health clinics, or clean water. This is fair enough, so let’s examine some of the benefits of rural electrification. Before getting started, here are some links to related posts on this blog.
One reason for this skeptical attitude towards the impact of electricity in developing countries is that as friend of mine used to say, “Electricity by itself is nothing more than a dangerous wire.” The service being purchased is not really electricity at all, but such benefits as cooling, lighting, communications, cooling, heating, and socializing. Electricity is a means to an end and not the end itself. It also should be noted that electricity can be provided through a grid as is the case in most of the developed world, or through decentralized generation that often is based on renewable energy.
Computer Lab in Northern Vietnam: Source: World Bank
The surprising thing is that those questioning the benefits of rural electrification go home in the evening, turn on their televisions, check their email, browse the internet, enjoy heating in winter and air conditioning in summer, sometimes cook their meals with electricity and sit down in a comfortable chair and read a nice book. It is true that not all of the benefits of electricity are affordable to poor people in developing countries, but certainly lighting, television, fans, and are within their means. Computers and internet cannot be far behind. Really, how can societies advance without electricity? I will leave the issue whether the benefits are with the costs of providing electricity for a later blog post. To view a film and other resources continue below.
Some years ago I completed a book on this subject called Electric Power for Rural Growth. In 2014 I published the second edition. There also has been a comprehensive review of The Welfare Impact of Rural Electrification in the World Bank by the Independent Evaluation Group. For evaluating the impact of improved and less expensive lighting for rural households, there is an interesting economic four page article by Henry Peskin that explains the theory of consumer surplus and how it is applied to evaluating the benefits of rural electrification in A Primer on Consumer Surplus. For a more comprehensive work on this subject the original study that applied this approach to rural electrification was pioneered in study called Rural Electrification and Development in the Philippines.
For the more statistically inclined there are some recent papers just published on The Welfare Impact of Rural Electrification in Vietnam and Bangladesh. According the Vietnam paper, based two surveys in 2002 and 2005 households who adopt electricity experience improvements in the school attendance of their children. Electricity is used immediately for television viewing and of course for electric lighting making it easier to read, socialize, and enjoy the evening hours. In some cases this can lead to improved incomes as lighting makes possible running small businesses in the home.
