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Homes without reliable access to energy such as electricity, heating, cooling, etc.

Energy poverty is lack of access to modern energy services. It refers to the situation of large numbers of people in developing countries and some people in developed countries whose well-being is negatively affected by very low consumption of energy, use of dirty or polluting fuels, and excessive time spent collecting fuel to meet basic needs. Today, 759 million people lack access to consistent electricity and 2.6 billion people use dangerous and inefficient cooking systems.[1] It is inversely related to access to modern energy services, although improving access is only one factor in efforts to reduce energy poverty. Energy poverty is distinct from fuel poverty, which primarily focuses solely on the issue of affordability.

The term "energy poverty" came into emergence through the publication of Brenda Boardman's book, Fuel Poverty: From Cold Homes to Affordable Warmth (1991). Naming the intersection of energy and poverty as “energy poverty” motivated the need to develop public policy to address energy poverty and also study its causes, symptoms, and effects in society. When energy poverty was first introduced in Boardman's book, energy poverty was described as not having enough power to heat and cool homes. Today, energy poverty is understood to be the result of complex systemic inequalities which create barriers to access modern energy at an affordable price. Energy poverty is challenging to measure and thus analyze because it is privately experienced within households, specific to cultural contexts, and dynamically changes depending on the time and space.[2]

According to the Energy Poverty Action initiative of the World Economic Forum, "Access to energy is fundamental to improving quality of life and is a key imperative for economic development. In the developing world, energy poverty is still rife."[3] As a result of this situation, the United Nations (UN) launched the Sustainable Energy for All Initiative and designated 2012 as the International Year for Sustainable Energy for All, which had a major focus on reducing energy poverty. The UN further recognizes the importance of energy poverty through Goal 7 of its Sustainable Development Goals to "ensure access to affordable, reliable, sustainable, and modern energy for all."[1]

Causes

Energy sources

Women gathering firewood for fuel.

Rural areas are predominant in mostly developing countries, and the rural areas in the countries do not have modern energy infrastructure. They have heavily relied on traditional biomass such as wood fuel, charcoal, crop residual, and wood pellets. Because the lack of modern energy infrastructure like power plants, transmission lines, and underground pipelines to deliver energy resources such as natural gas, petroleum that need high or cutting-edge technologies and extremely high upfront costs, which are beyond their financial and technological capacity. Although some developing countries like the BRICS have neared the energy-related technological level of developed countries and have financial power, most developing countries are still dominated by traditional biomass. According to the International Energy Agency, "use of traditional biomass will decrease in many countries, but is likely to increase in South Asia and sub-Saharan Africa alongside population growth."[4]

Energy poverty projects involving renewable sources can also make a positive contribution to low-carbon development strategies.

Energy price increases and poverty

Energy tariff increases are often important for environmental and fiscal reasons, but they can at times increase levels of household poverty. A 2016 study assesses the expected poverty and distributional effects of an energy price reform. In the context of Armenia; it estimates that a large natural gas tariff increase of about 40% contributed to an estimated 8% of households to substitute natural gas mainly with wood as their source of heating, and it also pushed an estimated 2.8% of households into poverty, below the national poverty line. The study also outlines the methodological and statistical assumptions and constraints that arise in estimating causal effects of energy reforms on household poverty. It also discusses possible effects of such reforms on non-monetary human welfare that are more difficult to measure statistically.[5]

The 2001 study High Energy by Jules Oldham for the Scottish Council for Single Homeless showed the difference between a new tenancy succeeding or failing when people moved on from homelessness, as a result of the new tenant having utilities in place before moving in, an understanding of payment options and meter types, and accessing the correct tariff to suit their budget and financial needs.

Energy ladder

The ‘Energy Ladder’: What energy sources do people on different incomes rely on?

An energy ladder shows the improvement of energy use corresponding to an increase in the household income. Basically, as income increases, the energy types used by households would be cleaner and more efficient but more expensive as moving from traditional biomass to electricity. "Households at lower levels of income and development tend to be at the bottom of the energy ladder, using fuel that is cheap and locally available but not very clean nor efficient. According to the World Health Organization, over three billion people worldwide are at these lower rungs, depending on biomass fuels—crop waste, dung, wood, leaves, etc.—and coal to meet their energy needs. A disproportionate number of these individuals reside in Asia and Africa: 95% of the population in Afghanistan uses these fuels, 95% in Chad, 87% in Ghana, 82% in India, 80% in China, and so forth. As incomes rise, we would expect that households would substitute to higher-quality fuel choices. However, this process has been quite slow. In fact, the World Bank reports that the use of biomass for all energy sources has remained constant at about 25% since 1975."[6]

Units of analysis

Domestic energy poverty

Domestic energy poverty refers to a situation where a household does not have access or cannot afford to have the basic energy or energy services to achieve day to day living requirements. These requirements can change from country to country and region to region. The most common needs are lighting, cooking energy, domestic heating or cooling.[7]

Lack of access to electricity is one indicator of energy poverty.

Other authors consider different categories of energy needs from "fundamental energy needs" associated to human survival and extremely poor situations. "Basic energy needs" required for attaining basic living standards, which includes all the functions in the previous (cooking, heating and lighting) and, in addition energy to provide basic services linked to health, education and communications. "Energy needs for productive uses" when additionally basic energy needs the user requires energy to make a living; and finally "Energy for recreation", when the user has fulfilled the previous categories and needs energy for enjoyment."[8] Until recently energy poverty definitions took only the minimum energy quantity required into consideration when defining energy poverty, but a different school of thought is that not only energy quantity but the quality and cleanliness of the energy used [9] should be taken into consideration when defining energy poverty.

One such definition reads as:

"A person is in 'energy poverty' if they do not have access to at least:
(a) the equivalent of 35 kg LPG for cooking per capita per year from liquid and/or gas fuels or from improved supply of solid fuel sources and improved (efficient and clean) cook stoves
and
(b) 120kWh electricity per capita per year for lighting, access to most basic services (drinking water, communication, improved health services, education improved services and others) plus some added value to local production

An 'improved energy source' for cooking is one which requires less than 4 hours person per week per household to collect fuel, meets the recommendations WHO for air quality (maximum concentration of CO of 30 mg/M3 for 24 hours periods and less than 10 mg/ M3 for periods 8 hours of exposure), and the overall conversion efficiency is higher than 25%. "[10]

Composite indices

Energy Development Index (EDI)

First introduced in 2004 by the International Energy Agency (IEA), the Energy Development Index (EDI) aims to measure a country’s transition to modern fuels.[11] It is calculated as the weighted average of four indicators: “1) Per capita commercial energy consumption as an indicator of the overall economic development of a country; 2) Per capita consumption of electricity in the residential sector as a metric of electricity reliability and customers׳ ability to financially access it; 3) Share of modern fuels in total residential energy sector consumption to indicate access to modern cooking fuels; 4) Share of population with access to electricity.” [12] (The EDI was modeled after the Human Development Index (HDI).) Because the EDI is calculated as the average of indicators which measure the quality and quantity of energy services at a national level, the EDI provides a metric that provides an understanding of the national level of energy development. At the same time, this means that the EDI is not well-equipped to describe energy poverty at a household level.

Multidimensional Energy Poverty Index (MEPI)

Measures whether an individual is energy poor or rich based on how intensely they experience energy deprivation. Energy deprivation is categorized by seven indicators: “access to light, modern cooking fuel, fresh air, refrigeration, recreation, communication, and space cooling.”[13] An individual is considered energy poor if they experience a predetermined number of energy deprivations. The MEPI is calculated by multiplying the ratio of people identified as energy poor to the total sample size and the average intensity of energy deprivation of the energy poor.[14] Some strengths of the MEPI is that it takes into account the number of energy poor along with the intensity of their energy poverty. On the other hand, because it collects data at a household or individual level, it is harder to understand the broader national context.

Energy Poverty Index (EPI)

Developed by Mirza and Szirmai in their 2010 study to measure energy poverty in Pakistan, the Energy Poverty Index (EPI) is calculated by averaging the energy shortfall and energy inconvenience of a household.[15] Energy inconvenience is measured through indicators such as: “Frequency of buying or collecting a source of energy; Distance from household traveled; Means of transport used; Household member’s involvement in energy acquisition; Time spent on energy collection per week; Household health; Children’s involvement in energy collection.” Energy shortfall is measured as the lack of sufficient energy to meet basic household needs. This index weighs more heavily the impact of the usability of energy services rather than its access. Similar to the MEPI, the EPI collects data at a micro-level which lends to greater understanding of energy poverty at the household level.

Reviews and critiques of measuring energy poverty

Energy poverty is challenging to define and measure because energy services cannot be measured concretely and there are no universal standards of what are considered basic energy services. Energy poverty is too complex to work and measure with an indicator and framework that is internationally accepted in a global context. [16]Therefore, binary measures and multidimensional measures of energy poverty are required to consolidate and establish indicators that simplify the process of measuring and tracking energy poverty globally [16]. There is no homogenous definition and international measure to use as a standard globally, even the definition of energy poverty is not the same among countries in the European Union. [17]

Intersectional issues

Like other economic justice issues, energy poverty often exacerbates existing vulnerabilities amongst already vulnerable communities.

Children gathering firewood.

Gender

In developing countries, women and girls health, educational, and career opportunities are significantly affected by energy because they are usually responsible for providing the primary energy for households.[18] Women and girls spend significant amount of time looking for fuel sources like wood, paraffin, dung, etc. leaving them less time to pursue education, leisure, and their careers. Additionally, using biomass as fuel for heating and cooking disproportionately affects women and children as they are the primary family members responsible for cooking and other domestic activities within the home. Being more vulnerable to indoor air pollution from burning biomass, 85% of the 2 million deaths from indoor air pollution are attributed to women and children.[19] In developed countries, women are more vulnerable to experiencing energy poverty because of their relatively low income compared to the high cost of energy services. For example, women-headed households made up 38% of the 5.6 million French households who were unable to adequately heat their homes. Older women are particularly more vulnerable to experiencing energy poverty because of structural gender inequalities in financial resources and the ability to invest in energy-saving strategies.[20]

Education

With many dimensions of poverty, education is a very powerful agent for mitigating the effects of energy poverty. Limited electricity access affects students’ quality of education because it can limit the amount of time students can study by not having reliable energy access to study after sunset.[21] Additionally, having consistent access to energy means that girl children, who are usually responsible for collecting fuel for their household, have more time to focus on their studies and attend school.[21]

90 percent of children in sub-Saharan Africa go to primary schools that lack electricity. In Burundi and Guinea only 2% of schools are electrified, while in DR Congo there is only 8% school electrification for a population of 75.5 million (43% of whom are under 14 years). In the DRC alone, by these statistics, there are almost 30 million children attending school without power.[22]

Education is a key component in growing human capital which in turn facilitates economic growth by enabling people to be more productive workers in the economy.[23] As developing nations accumulate more capital, they can invest in building modern energy services while households gain more options to pursue modern energy sources and alleviate energy poverty.[21]

Protest for Energy Poverty & Justice

Health

Due to traditional gender roles, women are generally responsible to gathering traditional biomass for energy. Women also spend much time cooking in a kitchen. Spending significant time harvesting energy resources means women have less time to devote to other activities, and the physically straining labor brings chronic fatigue to women. Moreover, women and children, who stick around their mothers to help with domestic chores, respectively, are in danger of long-term exposure to indoor air pollution caused by burning traditional biomass fuels. During combustion, carbon monoxide, particulates, benzene, and the likes threaten their health. As a result, many women and children suffer from acute respiratory infections, lung cancer, asthma, and other diseases. "The health consequences of using biomass in an unsustainable way are staggering. According to the World Health Organization, exposure to indoor air pollution is responsible for the nearly two million excess deaths, primarily women and children, from cancer, respiratory infections and lung diseases and for four percent of the global burden of disease. In relative terms, deaths related to biomass pollution kill more people than malaria (1.2 million) and tuberculosis (1.6 million) each year around the world."[24]Lack of access to energy services has even been proven to increase feelings of isolation and despair within those affected by these disadvantages.

Another connection between energy poverty and health is that households who are energy poor are more likely to use traditional biomass such as wood and cow dung to fulfill their energy needs. However, burning wood and cow dung leads to incomplete combustion and releases black carbon into the atmosphere. Black carbon may be a health hazard.[25]Research has found that people who live in energy poverty have an increased risk of respiratory diseases like influenza and asthma and even a positive correlation with higher mortality rates during winters[26]. Moreover, research analyzing the inadequate heating systems in houses in the United Kingdom has found a correlation between this lack of access to proper heating services and an increased risk of mortality from cardiovascular diseases.[26]


One specific recommendation for the case of reducing the negative effects of energy poverty on public health is the distribution and improvement to clean, efficient cook stoves among disadvantaged communities that suffer from the effects of lack of access to energy services. [27] Proposed as an alternative for the improvement of public health and welfare, the distribution of cooking stoves could be a more inexpensive and immediate approach to decreasing mortality rates within the sector of energy poverty. Distributing cleaner liquified petroleum gas (LPG) or electric stoves among developing countries would prevent the inadequate cooking and dangerous exposure to traditional biomass fuel.[27]Although this change to cleaner, and convenient to use appliances can be practical, there is still great emphasis within the movement to eliminate energy poverty through substantial policy change. [27]

Development

"Energy provides services to meet many basic human needs, particularly heat, motive power (e.g. water pumps and transport) and light. Business, industry, commerce and public services such as modern healthcare, education and communication are highly dependent on access to energy services. Indeed, there is a direct relationship between the absence of adequate energy services and many poverty indicators such as infant mortality, illiteracy, life expectancy and total fertility rate. Inadequate access to energy also exacerbates rapid urbanization in developing countries, by driving people to seek better living conditions. Increasing energy consumption has long been tied directly to economic growth and improvement in human welfare.[28] However it is unclear whether increasing energy consumption is a necessary precondition for economic growth, or vice versa. Although developed countries are now beginning to decouple their energy consumption from economic growth (through structural changes and increases in energy efficiency), there remains a strong direct relationship between energy consumption and economic development in developing countries."[29]

Climate change

In 2018, 70% of greenhouse gas emissions were a result of energy production and use. Historically, 5% of countries account for 67.74% of total emissions and 50% of the lowest-emitting countries produce only 0.74% of total historic greenhouse gas emissions.[30] Thus, the distribution, production, and consumption of energy services is highly unequal and reflects the greater systemic barriers that prevent people from accessing and using energy services. Additionally, there is a greater emphasis on developing countries to invest in renewable sources of energy rather than following the energy development patterns of developed nations.

Regional analysis

Energy poverty is a complex issue that is sensitive to the nuances of the culture, time, and space of a region. Thus, the terms "Global North" and "Global South" are generalizations and not always sufficient to describe the nuances of energy poverty, although there are broad trends in how energy poverty is experienced and mitigated between the Global North and South.

Global North

Energy poverty is most commonly discussed as fuel poverty in the Global North where discourse is focused on households' access to energy sources to heat, cool, and power their homes. Fuel poverty is driven by high energy costs, low household incomes, and inefficient appliances. (a global perspective) Additionally, older people are more vulnerable to experiencing fuel poverty because of their income status and lack of access to energy-saving technologies.[31] According to the European Fuel Poverty and Energy Efficiency (EPEE), approximately 50-125 million people live in fuel poverty.[32] Like energy poverty, fuel poverty is hard to define and measure because of its many nuances. The United Kingdom (UK) and Ireland, are one of the few countries which have defined fuel poverty to be if 10% of a household's income is spent on heating/cooling.[33] Another EPEE project found that 1 in 7 households in Europe were on the margins of fuel poverty by using three indicators of checking for leaky roofs, arrears on utility bills, ability to pay for adequate heating, mold in windows.[34] High energy prices, insufficient insulation in dwellings,[35] and low incomes contribute to increased vulnerability to fuel poverty. Climate change adds more pressure as weather events become more cold and hot, thereby increasing demand for fuel to cool and heat the home. The ability to provide adequate heating during cold weather has implications for people’s health as cold weather can be an antagonistic factor to cardiovascular and respiratory illness.[36]

Global South

Energy poverty in the Global South is largely driven by a lack of access to modern energy sources because of poor energy infrastructure, weak energy service markets, and insufficient household incomes to afford energy services.[37] However, recent research suggests that alleviating energy poverty requires more than building better power grids because there is a complex web of political, economic, and cultural factors that influence a region’s ability to transition to modern energy sources.[38] Energy poverty is strongly linked to many sustainable development goals because greater energy access enables people to exercise more of their capabilities. For example: greater access to clean energy for cooking improves the health of women by reducing the indoor air pollution associated with burning traditional biomasses for cooking; farmers can find better prices for their crops using telecommunication networks; people have more time to pursue leisure and other activities which can increase household income from the time saved from looking for firewood and other traditional biomasses, etc.[38] Because the impacts of energy poverty on sustainable development are so complex, energy poverty is largely addressed through other avenues that promote sustainable development in regions within the Global South.

Africa

Africa’s unique challenge with energy poverty is its rapid urbanization and booming urban centers. Lack of access to modern energy services in African cities is linked to stagnant incomes for residents. On average, only 25% of African city-dwellers have electricity access. Historical trends show that Africa’s rapid population growth has not been proportionally matched by increased access to electricity. The rise of poverty in urban centers in addition to the growing population and energy demand is driving up the cost of electricity, making energy even more inaccessible for Africa's least advantaged individuals.[39]

South Asia

Energy poverty in South Asia encompasses more than just unreliable, unaffordable access to energy; it also includes the broader dimensions of the growing demand for electricity, access to energy, energy dependence, environmental threats to the energy system, and global pressures to decarbonize. Energy demand in South Asia has grown at an average annual rate of five percent in the past two decades, and this demand is projected to double by 2050.[40] The demand for electricity in particular has been driven by the increasing population and the development of industry throughout the region.[40] Although a push for energy efficiency has substantially reduced electricity demand due to economic growth,[41] the electricity system in the region is still struggling to meet the needs of the growing population and economy.

In 2020, 95.8 percent of the total population in South Asia, and 99.7 percent of the urban population, had access to electricity, making it the second-largest region in the world with an electricity access deficit.[41] However, in India only ten percent of homes in a village must be connected to the electricity grid in order for that entire village to be considered electrified.[42] Other complications that lead to energy poverty include: flaws in the energy system that result in power losses, load shedding practices that shut down the grid during peak periods, and power that is stolen through informal electricity lines.[43][44]

The reliability of the electricity system can also be hindered by the source of the electricity generated. In 2014, South Asia imported one-third of the total energy consumed in the region.[45] Due to this energy dependence on imported fuel, energy resource scarcity and fluctuations in global price can result in higher costs for electricity in South Asia and can therefore make electricity services less accessible for the least advantaged people.[46] The issue of energy poverty is compounded when climate change is factored into the equation. South Asian cities like Delhi in India are bearing the social and fiscal costs of this demand-supply gap,[47] resulting in a power crisis.

Latin America

The United Nations Development Programme (UNDP) and the Inter-American Development Bank have provided reports and reviews of programs and policies designed to address energy poverty within Latin America and the Caribbean (LAC). [48]Although studies show 96 percent of inhabitants of the LAC have access to electricity, gaps of energy poverty are still prevalent. Oftentimes linked to socioeconomic cleavages, energy poverty within LAC still exposes more than 80 million people to respiratory illnesses and diseases for relying on fuels like charcoal to cook. [48]

According to the United Nations, urban energy poverty in Latin America has nearly doubled in the last two decades.[49] Growing rates of urbanization and industrialization in Buenos Aires, Argentina, Rio de Janeiro, Brazil, and Caracas, Venezuela have exacerbated the regions' high energy losses, increased inefficient energy use, and increased political opportunism on marginalized groups affected by urban poverty. [49] The case for analyzing energy poverty in Argentina, Brazil, and Venezuela have been in understanding the context of energy access within urban areas and the challenges within the context of global development. [49]The widespread increase in energy across Latin America does not have a uniform solution. In fact, different efforts and legislation to increase energy accessibility have had opposing effects in different Latin American countries.[50] In Venezuela, for instance, public attitude supports the free supply of energy across the nation while in Brazil, the public is willing to pay as long as the government passes reforms for the affordability of energy services. [49] Although there has been a recent increase in studies related to energy poverty in Latin America, there have not been many studies and data in the past on the prevalence of energy poverty in many Latin American countries with different climatic areas. [17] For instance, studies in Mexico in 2022 determined that 66 percent of households suffered from energy poverty, with 38 percent of the cases being due to accessibility, and 34 percent due to affordability. [51]

International efforts

See also: government intervention

One challenge for developing nations is to support the growing energy needs of their growing populations by expanding their energy infrastructure. Without intentional policy-making and action, more people in developing countries will face extreme difficulties in accessing modern energy services.

International development agencies' intervention methods have not been entirely successful. "International cooperation needs to be shaped around a small number of key elements that are all familiar to energy policy, such as institutional support, capacity development, support for national and local energy plans, and strong links to utility/public sector leadership. Africa has all the human and material resources to end poverty but is poor in using those resources for the benefit of its people. This includes national and international institutions as well as the ability to deploy technologies, absorb and disseminate financing, provide transparent regulation, introduce systems of peer review, and share and monitor relevant information and data."[52]

The number of people who currently use modern energy should increase as the developing world governments take action to reduce social costs and to increase social benefits by gradually spreading modern energy to their people in rural areas. It is difficult for the government of developing countries to participate in the effective development of energy without external aid due to the large funding required to promote the distribution of modern energy. International cooperation is necessary for framing developing countries' stable future energy infrastructure and institutions. Current international aid is playing an important role in reducing the gap between developing and developed countries associated with the use and distribution of modern energy.

European Union

There is an increasing focus on energy poverty in the European Union, where in 2013 its European Economic and Social Committee formed an official opinion on the matter recommending Europe focus on energy poverty indicators, analysis of energy poverty, considering an energy solidarity fund, analyzing member states' energy policy in economic terms, and a consumer energy information campaign.[53] In 2016, it was reported how several million people in Spain live in conditions of energy poverty. These conditions have led to a few deaths and public anger at the electricity suppliers' artificial and "absurd pricing structure" to increase their profits.[54][55] In 2017, poor households of Cyprus were found to live in low indoor thermal quality, i.e. their average indoor air temperatures were outside the accepted limits of the comfort zone for the island, and their heating energy consumption was found to be lower than the country's average for the clusters characterized by high and partial deprivation. This is because low income households cannot afford to use the required energy to achieve and maintain the indoor thermal requirements.[56]

Global Environmental Facility

"In 1991, the World Bank Group, an international financial institution that provides loans to developing countries for capital programs, established the Global Environmental Facility (GEF) to address global environmental issues in partnership with international institutions, private sector, etc., especially by providing funds to developing countries’ all kinds of projects. The GEF provides grants to developing countries and countries with economies in transition for projects related to biodiversity, climate change, international waters, land degradation, the ozone layer, and persistent organic pollutants. These projects benefit the global environment, linking local, national, and global environmental challenges and promoting sustainable livelihoods. GEF has allocated $10 billion, supplemented by more than $47 billion in cofinancing, for more than 2,800 projects in more than 168 developing countries and countries with economies in transition. Through its Small Grants Programme (SGP), the GEF has also made more than 13,000 small grants directly to civil society and community-based organizations, totalling $634 million. The GEF partnership includes 10 agencies: the UN Development Programme; the UN Environment Programme; the World Bank; the UN Food and Agriculture Organization; the UN Industrial Development Organization; the African Development Bank; the Asian Development Bank; the European Bank for Reconstruction and Development; the Inter-American Development Bank; and the International Fund for Agricultural Development. The Scientific and Technical Advisory Panel provides technical and scientific advice on the GEF's policies and projects."[57]

Climate Investment Funds

"The Climate Investment Funds (CIF) comprises two Trust Funds, each with a specific scope and objective and its own governance structure: the Clean Technology Fund (CTF) and the Strategic Climate Fund (SCF). The CTF promotes investments to initiate a shift towards clean technologies. The CTF seeks to fill a gap in the international architecture for development finance available at more concessional rates than standard terms used by the Multilateral Development Banks (MDBs) and at a scale necessary to help provide incentives to developing countries to integrate nationally appropriate mitigation actions into sustainable development plans and investment decisions. The SCF serves as an overarching fund to support targeted programs with dedicated funding to pilot new approaches with potential for scaled-up, transformational action aimed at a specific climate change challenge or sectoral response. One of SCF target programs is the Program for Scaling-Up Renewable Energy in Low Income Countries (SREP), approved in May 2009, and is aimed at demonstrating the economic, social and environmental viability of low carbon development pathways in the energy sector by creating new economic opportunities and increasing energy access through the use of renewable energy."[58]

See also

References

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