Why Wait? Seizing the Energy Access Dividend

Universal access to modern energy services is a key prerequisite for poverty eradication and enabling human and economic development. Across the world, one in every five people live without access to electricity. Most of the 1.06 billion people lacking electricity live in rural Sub-Saharan Africa and South Asia. Current projections show that 674 million people will still be without electricity in 2030, the target year for universal energy access under the Sustainable Development Goals. Such a prolonged energy access gap would profoundly compromise achievement of wide-ranging SDG goals on poverty and inequality, education, public health and climate change.

The need to accelerate energy access raises important questions about how best to do this and how faster advances can be achieved in the face of potentially competing priorities. For example, what would be lost in terms of human and economic development if energy access progress was slower than it needed to be? The recent rapid uptake of renewable energy systems, drop in technology prices and higher efficiency of appliances have boosted the range of viable electricity options and the speed at which electricity access can be provided, especially for remote rural areas that are typically the last to be reached with traditional electric-grid solutions. Different renewable technologies provide varying levels, or Tiers, of electricity service, as well as economic, social and environmental benefits.

 

The national energy access dividend, government target scenario

 

NOTES:

  • For Ethiopia, the Government Target Scenario is the dividend from achieving universal access by 2030, the SDG 7 target year, instead
    of 2031, which is the year universal access would be achieved if the rate of electrification required to deliver the government’s planned level of electrification in 2020 is projected forward. This would bring forward universal access by one year.
  • For Bangladesh and Kenya, the Government Target Scenario is the dividend from achieving universal access in 2030, the SDG 7 target year, instead of the government target year of 2021 and 2020, respectively. This shows the scale of benefits that would be forgone if access were delayed from current plans.
  • The dividend estimate is determined, among other things, by the assumptions about the distribution of households across Tiers (Section 2.4). In the case of Bangladesh, the assumption reflects the government’s intention to expand access primarily through grid connections and focus on larger solar off-grid systems

This research paper, Why Wait? Seizing the Energy Access Dividend (FR), explores the concept of an energy access dividend that decision makers can expect by providing electricity access to populations more quickly. It assigns a specific economic, social and environmental value that households and countries can expect by receiving and delivering different Tiers of service. Such a dividend would allow decision makers to quantify the benefits of delivering electricity access faster through decentralized electricity solutions rather than through more conventional, centralized grid-based approaches. These conventional approaches are proven to be more time consuming and expensive.

This report includes Energy Access Dividend estimates for Bangladesh, Ethiopia and Kenya, focused on financial savings, educational benefits and climate benefits. These three countries were selected due to their wide-ranging differences in terms of income levels, demographics and past and planned electrification rates. These countries also have significant populations without access to electricity. It is hoped that by integrating dividend projections into electrification, development and economic planning and budgeting decisions, government decision-makers will give closer attention and support to decentralized energy solutions as a key electrification strategy. By providing faster, lower-cost access to electricity, governments have an opportunity to accelerate improvements in people’s lives and livelihoods, as well as national economies.

Read the press release here.

Download the report here (FR)