Energy for all: The Next Challenge
| Date | 01 May 2012 |
| Published date | 01 May 2012 |
| DOI | http://doi.org/10.1111/j.1758-5899.2011.00158.x |
| Author | Fatih Birol |
Energy for all: The Next Challenge
Dr. Fatih Birol
IEA Chief Economist
There are three main global energy challenges that I see
in front of us: security of supply, the threat of environ-
mental damage caused by energy production and use,
and persistent energy poverty.
1
In the latest (2011) edition of the International Energy
Agency’s World Energy Outlook (WEO) we examine the
challenges that policy makers are facing as they look
forward. The first two challenges – energy security and
climate change – have justifiably received a great deal of
attention from policy makers, although major steps are
still lacking in these areas. While not losing sight of
these – especially as the world economic crisis threatens
to divert policy attention elsewhere – we need to focus
significantly more effort on the third energy challenge.
Access to affordable and reliable energy services is
fundamental for reducing poverty, promoting economic
growth and improving health. At currently expected
investment rates, however, the absolute number of peo-
ple without access to modern energy services is
expected to decline only slightly, and in some areas
even increase.
The WEO has helped focus attention on household
access to modern energy services for the past decade,
beginning in 2002 when we first estimated the number
of people without electricity. In subsequent editions of
the WEO we have explored other aspects of energy pov-
erty, including the continued reliance on traditional
wood fires for cooking. More recently, we have esti-
mated the cost of providing universal access to modern
energy services by 2030 (a deadline recommended by an
advisory panel to the UN Secretary General). This year’s
edition devotes a special section to the critical issue of
financing such an endeavour.
We estimate that over 1.3 billion people (around 20
per cent of the world’s population) currently do not
have household access to electricity, and 2.7 billion
(around 40 per cent) remain without clean cooking facili-
ties.
2
More than 95 per cent of these people are in sub-
Saharan Africa or developing Asia, and 84 per cent are in
rural areas.
To the best of our knowledge, for the first time in
energy literature, we have estimated the total amount of
investment taking place globally to provide access to
modern energy services: a total of US$9.1 billion during
2009.
3
Approximately 34 per cent and 14 per cent of this
came from multilateral and bilateral development assis-
tance respectively, 30 per cent from domestic govern-
ment sources, and 22 per cent from private investors.
In the absence of major new policies, we project
annual investment in energy access through 2030 will
average about US$14 billion, most of which will continue
to go to grid electricity connections in urban areas. At
this level of investment, the share of population without
access to modern energy services will fall, but the abso-
lute numbers of those without access will decline only
slightly, still leaving about 1 billion people without elec-
tricity and 2.7 billion without clean cooking facilities in
2030.
The good news is that some countries have made pro-
gress and others are expected to do so as well. Major
successes can be seen in India and Vietnam, among oth-
ers. Recent survey data from India show that 67 per cent
of the rural population and 94 per cent of the urban
population reported expenditure on electricity during
2009, up from 56 per cent and 93 per cent since a simi-
lar survey in 2006. In Vietnam, the share of the popula-
tion with household electricity access increased from
under 5 per cent to 98 per cent in 35 years. Bangladesh
and Sri Lanka also have carried out successful energy
access programmes, while progress in Africa has been
seen recently in Angola and Congo, among others.
In our main scenario, increased access to modern
energy services in the future is driven largely by rapid
economic growth in several developing countries,
accompanied by rapid urbanisation in some cases. We
have also taken into account countries’ stated plans. Our
projections show India reaching an electrification rate of
98 per cent in urban areas and 84 per cent in rural areas
by 2030. In several other countries, national targets to
increase access are expected to succeed in delivering
improvements over the projection period, but only on a
limited scale. Many targets will not be achieved unless
robust national strategies and implementation pro-
grammes are put in place.
Our analysis of past trends and future investment
plans indicate that sub-Saharan Africa will have the
greatest difficulty keeping pace with its population
growth: although the share of the population without
household access to electricity is expected to fall there,
from 69 per cent in 2009 to 49 per cent in 2030, the
Global Policy Volume 3 . Issue 2 . May 2012
ª2011 London School of Economics and Political Science and John Wiley & Sons Ltd. Global Policy (2012) 3:2 doi: 10.1111/j.1758-5899.2011.00158.x
Special Section: Practitioner Commentary
184
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