Energy Poverty. Jeffrey Haeni USAID/EGAT/I&E. Infrastructure Workshop
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1 Energy Poverty Jeffrey Haeni USAID/EGAT/I&E Infrastructure Workshop a
2
3 Energy Poverty Senator Lugar: Approximately a quarter of the world s population lives with no or extremely limited access to electricity. Energy poverty can be a limiting factor in our efforts to promote economic development and improve quality of life, particularly in the health sector. How does USAID measure /define energy poverty? Deputy Administrator Steinberg:??? 3
4 Outline Energy Poverty What Why Who How 4
5 2003 Human Development Index Energy Access is Key to Development Steepest Curve Steepest curve Transforming Data from the 2005 UN Development Program Human Development Report Sustaining All Strong positive correlation between energy consumption and human development across all countries Energy impoverished countries improve human development rapidly with increased energy consumption Restrictive Developing ,000 10,000 15,000 20,000 25,000 30, Electricity consumption per capita (kilowatt-hours) Strong positive correlation between energy consumption and development across all F country categories
6 Cookstoves Health: indoor air pollution (IAP) causes 1.6 million premature deaths a year Climate Change: 25% of global Black Carbon emissions are estimated to stem from household cooking/heating practices Contributing factor to deforestation 6
7 Outline Energy Poverty What Why Who How 7
8 TRENDS IN THE ELECTRICITY SECTOR Electricity Shortage: In 2030, if no new policies are implemented, there will still be 1.4 billion people without electricity (most in Africa and Asia) Source: IEA, World Energy Outlook 2004
9 USAID Access Programs Post conflict - Liberia, Haiti, Afghan, Sudan Economic Growth - Bangladesh, Indonesia Social Programs (Health, Education ) Haiti, Zambia, Guyana Climate Change (RE microfinance earmark) India, Uganda, Kenya, etc.
10 Outline Energy Poverty What Why Who How 10
11 Success Stories Country Baseline Current (2008) GDP per capita Brazil 88% 10,471 China 99% 4,283 Jordan 99% 4,435 Syria 87% (1997) 99% 2,892 Vietnam 50% (1993) 85% 1,155 Thailand 7% (1970) 99% 1,155 Bangladesh 3% (1970) 33% 640
12 Relationship between Electricity Access and Poverty
13 Success Factor #1 Pricing and Sector Reforms 13
14 Renewable Energy Development: Cost Analysis (e.g. low hanging fruit) Maluku E. Nusa Tenggara Bangka Belitung W. Nusa Tenggara Papua West Kalimantan Riau Aceh East Kalimantan North Sulawesi South Kalimantan South Sumatera West Sumatera Lampung Nort Sumatera South Sulawesi Bali Jakarta East Java Central Java West Java Indonesia Source: PLN, , , ,353 1, , ,079 1, ,000 1,500 2,000 2,500 3,000 3,500 Landfill gas (5MW) Mini hydro(5mw) Wind (100kW 50 MW) Geothermal (200kW 50 MW) Average Revenue 1,766 IDR/kWh Cost of Services 2,300 2,245 2,364 2,612 2,821 3,080 = cost of service = revenue Source: PLN
15 Thousands of Customers Guatemala A success story Sources: MEM, PA Estimate Number of Customers Post- reform compound growth rate: +11% Pre-reform compound growth rate: +7% Significant increase of customers with access to electricity post-reform Electricity coverage increased from 47% to 88% after reform
16 Total Amount (%) Success Factor #2: Payment for services 1) Liberia ($0.45 per kwh) Collection Efficiency Rate for GOL Customers (%) Collection Efficiency Rate for All Other (%) Aug Sept Oct Nov Months ( ) Dec Jan Feb Mar Apr May Jun Total Collection Efficiency Rate (%) 2) Yei, Sudan 95% collection efficiency (600 customers), > $0.50 kwh
17 Who Pays? 17
18 Success Factor #3 Productive Use of Electricity Approach: Energy access will automatically ensure economic growth and development Result: - Value added processes, training, local buy-in not developed - Energy economic growth link weak 18
19 Source: ESMAP
20 Energy and Agriculture 20
21 Energy and Health Blood safety Prevention Rapid tests kits Laboratory Infrastructure testing reagents Hematology and chemistry lab equipment Treatment and Care Facilities Lighting Communications X-ray Computer Refrigeration
22 Success Factor #4: Integrated Planning On and Off-grid Approaches Approach: Bias towards off-grid or on-grid solutions alone Result: - Lack of coordination between grid expansion plans and off-grid projects - Off-grid systems cease operation once grid arrives - Grid extension may not be most cost effective 22
23 Limits of Grid Expansion 23
24 Off-Grid/Mini Grid Electricity 24
25 The Framework for SME Development Policy & Enabling Environment Entrepreneur (e) Demand (d) Technology (t) Knowledge (k) Services (Es) E (Enterprise) C (Customer) Services (Cs) Finance (Ef) Finance (Cf) Financial Social Environmental 25
26 How can a national program be structured? Example: Bangladesh World Bank Loan Infrastructure Development Company Limited (>100M) 6% loan $80 capital subsidy for household PV system Equipment and installation standards Grameen Shakti USAID Grant Other SME s 10% upfront payment 2 year loan 3 year service agreement - monthly service visit and bill collection Rural Households 350,000 PV systems installed since ,000 more per month
27 Source: Innovations in Rural Energy Delivery Navigant
28 Reaching Deep Ability to pay: High Medium Financing needs: None, cash sales Short-term credit Low Long-term credit Very Low Needs innovation Source: Adapted from material on selco-india.com 28
29 Technology Options Typical Clinic in Haiti with Initial Cap w/o Initial Cap Initial NPC NPC NPC NPC Scheme Capital $/khwr $/khwr $/khwr $/khwr D=.86/L D=1.80 D=.86/L D=1.80 Limited to 16,000 Whrs/day Solar Only 55, Solar / Diesel Hybrid (3 KW) 47, Solar / Diesel Hybrid (5KW) 50, Generator Only - (5KW) 7, Generator Only - (10KW) 12,
30 Reaching Across Source: ESMAP
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