Energy Access and Poverty in Latin America, 2018

Ecofogon Stove Used in Small Business in Nicaragua

Recently I helped complete a new report on energy access in Latin American the the Caribbean area. The title of the report is Meeting Challenges, Progress: The Benefits of Sustainable Energy Access in Latin America and the Carribean. Making This new report was produced by a joint effort between the Inter-American Development Bank and the United Natoins Development Programme.

Energy access is an essential prerequisite for economic, social, and human development. The 2015 United Nations Sustainable Development Goals (SDGs) explicitly recognized affordable and clean energy as a key factor in development, alongside education and poverty alleviation. The UN Sustainable Energy for All initiative (SEforALL) mobilizes international donors, countries, and the private sector to help people in developing countries gain access to modern energy services.

To assist in support of sustainable energy for all goals, I was recently involved in producing this joint study of the Inter-American Development Bank (IDB) and the United Nations Development Programme (UNDP). it provides a comprehensive review of energy poverty policies and programs in Latin America and the Caribbean. This report measures the progress and impact of energy-access programs and also documents the experience of successful projects. This study reviews cutting-edge methodologies to assist in program design, shares of experiences of successful programs and develops a vision for reaching sustainable energy for all in the LAC region.

With electricity coverage at more than 96 percent, Latin America and the Caribbean (LAC) is close to becoming the world’s first developing region to achieve universal access to electricity. Despite recent progress, within LAC there are still substantial pockets of energy poverty. Approximately 21.8 million people are without electricity access. More than 80 million people rely on firewood and charcoal for cooking that is burned in fuel-inefficient, primitive stoves. These traditional cooking technologies emit a significant amount of indoor air pollution (IAP), which has been linked to respiratory illnesses and adverse environmental impacts. Thus, in addition to promoting electricity, energy access programs also might give priority to the promotion of cleaner methods cooking by making available better stoves and cleaner burning fuels at reasonable costs.

The report also explores ways to measure energy poverty and monitor energy access in developing countries. The accuracy and effectiveness of tools such as the IEA’s household energy data efforts and the Global Tracking Framework depend on collecting information through standardized national surveys. Approaches to measuring energy poverty and monitor energy access have increasingly focused on the provision of energy services such as lighting, space conditioning and cooking.

The transition from low-quality energy services to more modern forms can be accomplished in different ways. As households in developing countries adopt electricity and clean methods of cooking, they benefit from higher quality, lower cost and convenient to use appliances. However, measuring the societal and developmental benefits of energy investments--though difficult--is important.

Two basic approaches have evolved over the years to measure the benefits of energy access: (i) consumer surplus and (ii) regression-based techniques. The consumer surplus approach evaluates the economic benefits of energy services by measuring increased demand resulting from lower costs of such energy end uses such as lighting, radio and television. When possible, rigorous impact evaluation techniques based on multivariate models can be used to more directly measure the socioeconomic benefits associated with energy access and modern energy services including higher income and improved education.

In recent years, new approaches for meeting the requirements of modern and sustainable energy services have emerged. Due to technical and market changes, new types of equipment have become available for providing energy services to rural areas. In LAC, three basic models have been developed to provide rural populations with electricity service: (i) main grid extension, (ii) community networks, and (iii) individual home-based systems (including clean cookstoves).

The level of investments necessary to achieve the 2030 SDG target for expanded electricity access for all will be quite high. Reaching the universal access goal will require developing innovative partnerships between the public and private sectors. All three models benefit from favorable institutional and policy conditions, including funding mechanisms like subsidies and small-scale finance. In addition, various kinds of specialized energy funds have been developed to promote energy access. The new focus on remote areas may require some rethinking of the institutions and subsidies necessary to promote decentralized electrification programs.

A multifaceted approach to solving rural energy problems is essential for bringing remote or underserved populations into the twenty-first century. New electricity technologies and innovative business models are emerging to deal with the poorest and most remote populations in LAC. Such innovation needs to expand to include more initiatives for better cooking fuels and clean-burning, fuel-efficient biomass stoves. Proper impact evaluation of energy access interventions is needed to justify program subsidies and to better target such programs to poor and remote populations.

Over the past two decades, the LAC region has made remarkable progress toward providing sustainable, modern energy for all. Going forward, the challenge is to provide electricity and clean cooking solutions to the region’s most remote, vulnerable and poorest populations.

What is Rural Electrification: New Technologies and Old Definitions?

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).

Small Photovoltaic Lighting Systems: Niche or Not

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.

Promoting Solar Home Systems and Improved Biomass Stoves: A Comparison

Solar PV Adoption by Herders, Qinghai, China
Photo by China REDP Team

Over the past 15 years strategies for solar home system promotion have moved from a niche activity to the mainstream. Recently I have been thinking that there are quite a few similarities in the obstacles that were faced by solar homes system in the early years and those confronting the new improved biomass stoves today. I thought it might be a good time to explore what we have learned over the years, and what lessons might be relevant for scaling up the adoption of improved biomass stoves.

Both solar home systems and improved stoves are used primarily for household energy services such as cooking and lighting. They both provide significant improvements compared to the kerosene lamp or an open fire. Both devices also involve fairly large initial costs that are barely affordable to the majority of populations in developing countries, but the cost to operate them is fairly low. Solar home systems cost on the order of US $200-$300 and the new generation of improved stoves range from US $10 to $70 or more. As the old joke goes “Solar (read that renewable) energy is free, but it ain’t cheap.”

 

Today solar home systems are considered fairly mainstream and adoption levels though still somewhat limited are rising quickly in many countries. With the exception for the older large programs such as china, progress is being made by improved biomass stove programs, but they also have quite a long way to go to be accepted on a large scale in more countries.

Much more below the break....