Universal access to energy would herald enormous economic and social benefits

14 June 2012

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Providing modern access to energy for all the world’s citizens is achievable and would have only a minor impact on global energy demand and carbon dioxide emissions, according to IEA Executive Director Maria Van der Hoeven.

Writing in the Commonwealth Ministers Reference Book, she warned against believing that bringing electricity to 1.3 billion people who currently have no access to it, as well as clean cooking facilities to 2.7 billion people, would have a significant negative impact on both domestic energy security (the uninterrupted availability of energy sources at an affordable price) or global climate change.

Ms. Van der Hoeven argued that universal energy provision would, in fact, herald enormous economic and social benefits for developing and emerging Commonwealth members.

“Energy access plays a strong role in poverty eradication, reducing infant mortality, improving education, ameliorating gender inequality, attaining environmental sustainability, and accelerating global economic growth and prosperity,” she wrote.

Ms. Van der Hoeven noted that the greatest challenge is in sub-Saharan Africa, where today only 31% of the population has access to electricity – the lowest in the world.

“Electricity consumption in sub-Saharan Africa, excluding South Africa, is roughly equivalent to consumption in New York State,” she observed. “In other words, the 20 million inhabitants of New York consume roughly the same quantity of electricity each year as the 849 million people of sub-Saharan Africa.”

Turning to ways in which energy challenges for developing countries can be met, the IEA’s Executive Director wrote that there is an opportunity for renewables to play a much bigger role. The growth of the global renewables market means there is now a suite of well-established technologies that can provide energy cost-competitively under the right conditions, she argued.

According to analysis in the World Energy Outlook, the IEA’s flagship publication, the costs of achieving universal access to modern energy are manageable. The annual investment required to meet this goal by 2030 is USD 48 billion. Countries spent nearly ten times this amount on fossil fuel subsidies alone in 2009.

While foreign aid is important, private sector investment – coming from a broad range of actors – up to USD 15 billion would be needed to achieve universal access to modern energy globally. Compared to today, of all sources of investment, private sector investments need to grow the most.

“That will require sound regulatory frameworks to encourage foreign and domestic investment, and the empowerment of local entrepreneurs to provide financing and management at the community level,” Ms. Van der Hoeven concluded.

Click here to read Ms Van der Hoeven’s article in the Commonwealth Ministers Reference Book.