Energy poverty is an unacceptable blight – one that won’t disappear unless strong, coordinated actions are taken on a global scale. Now, a new report from the International Energy Agency shows that universal access to modern energy by 2030 is an achievable goal and spells out exactly how to pay for it.
“Eradicating energy poverty is a moral imperative, and this report shows that it is achievable. Now it is just a question of mustering the political will,” said IEA Executive Director Maria van der Hoeven as she launched the report. “In too many countries today, children cannot do their homework because they have no light. Food cannot be kept because there is no electricity. In short, modern society cannot function. The United Nations has declared 2012 the ‘International Year of Sustainable Energy for All,’ and this is an excellent opportunity for us to agree on rapid collective action to address this unacceptable problem.”
The IEA report, “Energy for All: financing access for the poor,” is an early excerpt of the World Energy Outlook 2011. Ms. Van der Hoeven and IEA Chief Economist Fatih Birol launched the report today at Energy for All, a special conference that the government of Norway and the IEA organised to explore financing solutions and policies for increased energy access.
The report contains the following key findings:
- Over 1.3 billion people, around 20% of the global population, lack access to electricity, and 2.7 billion people, around 40% of the population, are without clean cooking facilities. More than 95% of these people are either in sub-Saharan Africa or developing Asia. Modern energy access would fundamentally improve their lives by improving education, achieving gender equality, attaining environmental sustainability, preventing premature deaths from respiratory diseases, and accelerating global economic growth and prosperity.
- Investment of USD 48 billion per year is needed to provide universal energy access to the billions of the world’s poor who lack it by 2030. While this is more than five times the current level of investment to expand energy access, it only represents around 3% of projected global energy investment.
- There is not necessarily any tension between achieving universal energy access, climate sustainability and energy security. Providing electricity access to those who lack it would increase carbon dioxide emissions by only 0.7%, equivalent to the annual emissions of New York State but giving electricity to a population more than 50 times the size.
- In 2009, USD 9.1 billion was invested globally in extending access to modern energy services. But in the absence of more vigorous action, 1.0 billion people would remain without electricity and, despite progress, population growth means that 2.7 billion people would remain without clean cooking facilities in 2030.
- Of the USD 48 billion per year required to fix the problem, USD 18 billion would need to come from multilateral and bilateral development sources, USD 15 billion from the governments of developing countries and USD 15 billion from the private sector. This means that all sources of funding need to grow significantly, with the private sector needing to increase the most.
- National governments must adopt strong governance and regulatory frameworks and invest in internal capacity building. The public sector, including multilateral and bilateral institutions, needs to use its tools to leverage greater private sector investment where the commercial case is marginal and encourage the development of replicable business models.