A Handbook for Measuring Energy Access in Developing Countries

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.

This study can be downloaded from the Inter-American Development Bank's website.

The Household Benefits of Lighting with Electricity: Consumer Surplus Explained

Figure 1. Consumer Surplus for Lighting

(Graphic: Doug Barnes)

By Doug Barnes

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.

Rural Electricity Adoption in India: What's Standing in the Way?

By Doug Barnes

For several years I have been involved in a project to understand why the electricity connection rates in India are not higher than they are. This resulted in a report probing various reason that are holding back India for achieving universal access, despite spending quite a bit of money on the problem. For details, see the report Power for All: Electricity Access Challenge in India. I have done quite a bit of work on India, including a some older major studies on Energy Strategies for Rural India (2002)  and The Impact of Energy on Women's Lives (2004). This new report complements the past work.

First some facts. Owing mainly to its large population, India still has by far the world’s largest number of households without electricity. About 311 million people still live without electricity, and they mostly reside in poor rural areas. By late 2012, the national electricity grid had reached 92 percent of India’s rural villages, about 880 million people. And 200 hundred million households in India live in villages with electricity, but they have not adopted service.

So what does this say about energy access? For me, given the significant benefits of rural electrification, with so many without electricity living in villages with grid service means that something is standing in the way of electricity adoption in India. For India it is necessary to understand the concepts involved in both village and household electrification. The electricity access rate is the percent of all households in India with electricity. The electricity availability rate is the percent of household living in communities with service, regardless of whether or not they have adopted electricity. Finally, the electricity hook-up rate is defined as the percent of households that have adopted electricity in communities that have service.

Electric Power for Rural Growth, 2nd Edition.

Click Image
for Amazon "Look Inside"

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.

To see a description of the book on this site, click on this link.

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.

Two Billion People Gain Electricity Access: 1970-2010

By Doug Barnes



Rural Energy
and Development,
Published 1996

In 1996 I wrote "It is hard not to be daunted by the scale of providing energy services to the world's rural population. There are nearly two billion people without access to modern forms of energy such as electricity or oil. This book describes the plight of these two billion. Its message, however, is that there are now many ways in which their situation can be improved. For though the problem is daunting, practicable and affordable prescriptions are available." This was from the book Rural Energy and Development: Improving Energy Supplies for Two Billion People (World Bank, Washington DC). Click on the text for a scanned copy of the book. Unfortunately, this is the only free downloadable form, but it still can be purchase on commercial sites. 

At the time, no one was counting the number of people who were without electricity. My World Bank Director during that period was Richard Stern. He was very supportive of this new line of work on rural and household energy.  During those times when most people didn't give a thought to rural energy in international organizations, as the director of energy at the World Bank he took a risk that this long ignored issue would take on future importance. Only time would prove him right.

During one of our pre-publication meetings, he turned to me and asked, "How confident are you of the number two billion. It's in the title of the book, so it better be right." I squirmed a bit in my seat, knowing all the potential flaws in the numbers we had researched. However, at that time no one had taken the effort to calculate the number of people without electricity. The team that I worked with had been fairly meticulous in looking at those with and without electricity country by country.  As a result, I looked at him and confidently said, "No one has any better numbers than us." He still did not look convinced, but accepted our judgment. Later we would turn these numbers over to the International Energy Agency, which now keeps track of those rural electrification rates in developing countries.

Table 1 Rural Electrification in Developing Countries,
1970-2010
Source: Barnes, Electric Power for Rural Growth,
Second Edition, 2014 

As one of the first people to count the number of people without electricity, I recently took a look at some figures in my book Electric Power for Rural Growth published in the 1980s. The Second Edition of this book has now been published. I found that in 1970, the rural electrification rate in developing countries was only 12 percent, compared to more than 60 percent today (Table 1). 
Today, projecting backward from recent trends, I found some interesting results. In 1970 there were only about 2 billion rural people in developing countries, so about 1.75 billion people were without electricity. I estimate that during the 1970s and 1980s due to population growth and few international efforts involving rural electrification programs, the number of people without electricity kept growing to well over 2 billion. The incremental number of people with electricity was not even keeping up with population growth. 
During the late 1980s and the early 1990s, the number of people without electricity in developing countries finally started going down (due to significant programs in China, India, Thailand and other countries). People without electricity declined to about 2 billion people in the early 1990s. Today the number of people without electricity has declined further to 1.3 billion. Significant progress has been made in the last 40 years.

In the 1990s there were 2 billion people without electricity, and in 2010 the number was 1.3 billion. But this does not mean that only 0.7 billion new households have been provided with electricity between 1970 and 2010, because during those times populations grew at about 2% per year. Thus, during the last 30 years over 2 billion people have gained access to electricity. Countries like China, Thailand, Brazil and Mexico now have electricity access rates that are well over 95 percent, and they are working on the last remaining pockets of people without electricity.

Obviously the task is not complete. Even a large country like India still has more than 200 million people without electricity, and in rural Africa, astoundingly, only 1 in 8 people in rural areas has electricity. So complacency is not the order of the day, and actions are still needed to bring a modern life to those living in extreme poverty or very remote areas. This is still true even 30 years after the publication of the forward looking policy book Rural Energy and Development.

Energy Poverty and Income Poverty: How Do They Differ?

by Doug Barnes, Shahid Khandker and Hussain Samad

There is a continuing discussion over what constitutes energy poverty with several approaches being used to define it.  But as yet, no consensus has emerged for measuring and monitoring energy poverty and explaining why and how it differs from income poverty.  After all, income poverty is a standard measure, so if the two are highly related it would not be worth the effort to develop a unique measure for energy poverty.  In other words, why create a separate indicator of energy poverty because in the end it would just be a reflection of income poverty.  Everyone seems to know about energy poverty,but truly defining and measuring it gets a bit complicated. 

About 10 years ago energy poverty was thought to be related mainly to lack of access to electricity.  More recently the United Nations and Department of International Development of Great Britain (DFID) have broadened definitions of energy poverty to multiple indicators using somewhat arbitrary weights.  International Energy Agency (IEA) has never actually defined energy poverty (except that it is related to lack of access to modern energy), but advocated that better ways of using biomass energy for cooking should be an important policy for household energy.  Also, most international organizations measure energy poverty indicators as outputs (e.g., lack of electricity connections) rather than outcomes (e.g., welfare gains from electricity consumption).  Thus, unlike income poverty—which is usually based on minimum consumption of food and non-food items necessary to sustain a livelihood—energy poverty lacks a well-established theory based on energy demand to establish a relevant poverty line. 

In several recent papers the authors of this post have taken a different approach, focusing on energy demand in order to define energy poverty.  Like income poverty, energy poverty may be defined by the minimum energy consumption needed to sustain lives.  This approach defines an energy poverty line as a threshold of energy consumption needed to sustain life.  Similar to the concept of income poverty, we reasoned that there had to be a point at which energy is essential for living.  After all, people have to cook their food; in cold climates they must heat their homes; and they generally need a minimum level of light in the evening for basic tasks (sometimes including eating).  In theory this is all well and good, but the question remained how to measure that threshold. 

Figure 1:  Energy End Use Energy Consumption by Income Class,
Bangladesh and India

Therefore, we tested this demand approach using rich household survey data sets from Bangladesh and India.  We found that although energy consumption rises with income, this increase is not uniform (Figure 1).  This is because energy consumption at lower income groups turned out to be somewhat flat--in economist's terms it is income inelastic (does not rise with income).  After those minimum levels, energy consumption increased for households with ever higher incomes--once again in economist's terms, income elastic (does increase with income).  The theory is that for those levels where the energy income relationship is inelastic, this is the minimum level of energy necessary to maintain a healthy life.  This is the basic level of cooking, heating, lighting or other energy service needed to sustain life. 

Resurrection of ESMAP Knolwedge Exchange Series 2005-2009

Between 2005 and 2009 I was the technical editor of an ESMAP Knowledge Exchange Series that involved the publication of four page summaries of current energy issues.   When I recently reviewed these notes after four years, I was struck by both the quality of these four page notes and the continuing relevance of the issues covered.  Also, most of the authors of these notes have 20 to 30 years of experience of working on energy in developing countries issues.   Because they are no longer very prominent on the ESMAP website, buried beneath more recent work, I have decided to resurrect them in this blog

I am sorry for the long delay between posts.  Both an illness and work somehow got in the way of working on this blog.  I have decided to revive it, but will not post as often as before.  But continue to check back as there will be more to come. 

Retroactively I have grouped these Knowledge Exchange Notes into four groups.  The first is on grid and offgrid rural electrification programs.  The second is on electricity generated mainly for the electricity grid.  The third group is biomass energy both for cooking and transport.  Finally, there are two notes on how rising energy prices impact the poor. 

Energy Services for the Poor: A Review of World Bank Lending

By Doug Barnes

A couple of years ago I completed this review of Modernizing Energy Services for the Poor:  A World Bank Investment Review 2000-2008.  This was followed by extensive reviews and then revisions.  And this was followed by new revisions and fresh reviews and so on and so forth.  I am happy to announce that this report is finally out and comments are welcome, but no more reviews please. 



Source: World Bank Investments in Energy Access: 2000-08(Figures are Millions)

It may seem like a trivial exercise to classify energy access lending, but nothing could be further from the truth.  When you think about it almost all energy investments can be considered as promoting or being related to energy access.  Energy sector reform makes it possible to have a well functioning energy markets, and this is turn means the electricity and other forms of energy can reach the poor.  Likewise, rural electrification would not be possible without generation and transmission projects.  So where do you draw the line for ruling in investments as relating to energy access energy poverty or ruling them out. 

Much Ado About Energy Poverty: A Look Behind the IEA Numbers

By Doug Barnes

The International Energy Association (IEA) has published a very nice special paper with the title Energy Poverty: How to Make Energy Access Universal.  This report makes a substantial contribution to the work on energy poverty and provides the updated figures on electricity access and the use of fuels for cooking.  The purpose of the report is to raise the issue of energy poverty to a higher level of international visibility.  This is quite a welcome tact by an energy agency that for many years has specialized in addressing issues of modern energy. 

I really like several things about this new report.  For one, the energy access and cooking fuel issues are well documented and nicely presented in tables and figures.  They also have made this publication free as supplement to the World Energy Outlook.  However, if you want the more country specific details you must purchase World Energy Outlook.  Finally, IEA has now added cooking fuels to the other types of energy they track to compliment their emphasis on electricity and other modern fuels.  This will raise cooking fuels to a higher level of public awareness and tracking their use is a very good idea for policy makers in the field of energy. 

The report also has some very high figures for the investment costs necessary to reach universal modern energy access by 2030.  At first glance, I thought these figures were too high, so I decided to “look behind” the figures.  I can tell you that that even for someone as seasoned as me this was not an easy task. 

Where is Energy Poverty's REN21?

There is quite a bit of work going into monitoring and evaluation in developing countries today. This is mainly due to the international donor’s need to document that their projects either work or do not work. However, the effort to track international energy demand--as opposed to energy production--has lagged behind these efforts.

Rural Electrification, Peru:  Photo Laura Berman

For energy at least, there are several sources for international energy statistics such as rural electrification, renewable energy, and other forms of energy. But I can attest from doing two recent blogs on improved biomass stoves and rural electrification, it is not easy to gain access to these figures. The problems are that some classifications of statistics are not updated frequently, you have to pay a premium price to obtain them, or they are mostly based on production and not demand statistics.

That is why I want to congratulate the team at REN21 for publishing a yearly report on the status of renewable energy, with a recently released report for 2010. I got an inside glimpse of this work this year as the author of the chapter on rural renewable energy. So I can tell you the process of assembling all this information every year is not easy. Here is a quote from Eric Martinot who is one of the lead coauthors (along with Janet Sawin) of the report.

“I am pleased to announce publication of the REN21 Renewables 2010 Global Status Report. The report is a unique global synthesis of markets, investment, industry, policy, and rural energy, produced annually since 2005. This year the report is the best ever!This year's edition highlights many trends and milestones. One thing that stands out is how renewables are achieving parity with fossil fuels in several respects, including total investment in new power capacity and total amount of capacity added. And most growth rates in 2009 kept to 5-year and even decade-long averages. …You can download the full report from the REN21 website (including press release and other materials).”

Energy Poverty Continued: A Narrative from Andrew Barnett

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.

Continue below....

The Concept of Energy Poverty

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.

Migrant Workers Cooking-India: Photo WB/Curt Carnemark

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.