Energy Poverty Seen as History at IEA for $48 Billion a Year

Energy Poverty Seen as History at IEA for $48 Billion a Year
2011-10-10 10:45:00.0 GMT

By Simon Clark and Lananh Nguyen
Oct. 10 (Bloomberg) — The world’s entire population can
have electricity and cleaner stoves by 2030 if $48 billion is
invested each year, the International Energy Agency said in its
first estimate of the cost to end energy poverty.
The sum is about the same as the combined annual capital
spend of Europe’s two biggest oil companies, Royal Dutch Shell
Plc and BP Plc, and five times the $9.1 billion that was
invested in 2009 to boost energy access in developing nations.
There are 1.3 billion people, or 20 percent of the world
population, living without electricity and 2.7 billion that lack
clean cooking facilities, the IEA said.
The obstacles to providing modern energy access to everyone
are surmountable and national governments should publish targets
and provide more seed capital to incentivize private investors,
IEA Chief Economist Fatih Birol said in an interview from Paris.
“Providing energy for all is crucial for social and
economic development, and beyond that it’s a moral obligation,”
he said. An illustration of the inequality is that 791 million
people in sub-Saharan Africa excluding South Africa use about as
much energy each year as 19.5 million people in New York State,
Birol said, citing IEA data.
Judy Mirangoh burns fuels in her house in the Kenyan
village of Wanyororo to make heat and light because she has no
electricity. Her mud-walled home is less smoky since she
replaced her traditional wood-burning fire with a cookstove
earlier this year, helping her wallet and her health.

Three-Stone Fire

Such stoves burn half the wood of the old three-stone fire,
which contributes to indoor air pollution that causes about 1.5
million premature deaths a year, Birol said. The 45-year-old
single mother of two still burns paraffin in lamps for light.
“I wish I would have electricity in my home,” Mirangoh
said in a telephone interview. “The cook stove is really
helping me. It has less smoke, so it is cleaner and healthier.”
Vietnam is an example of a success story, according to the
IEA report titled “Energy for All, Financing Access for the
Poor” that was published today. The share of the population
with electricity has risen to 98 percent, from less than 5
percent, in the past 35 years, the agency said.
“The electricity supply has become far more reliable,”
Tran Thi Thu Lan, 58, a retired high school teacher in Hanoi,
said in an interview. “In the past we had rolling power cuts
which made our lives more difficult.”

Power Connection Plans

Bangladesh, Ghana and South Africa have plans to extend
electricity to all their populations by 2020, according to the
IEA. Indonesia plans to connect 95 percent of its people to
power supplies by 2025 while the Philippines targets 90 percent
of households by 2017, according to the IEA, which is the Paris-
based energy-security adviser of the Organization for Economic
Cooperation and Development.
In Kenya, 84 percent of the 33 million population had no
access to electricity in 2009, and 83 percent of Kenyans relied
on traditional cooking facilities powered mainly by wood,
agricultural and animal waste, the IEA said.
Mirangoh’s Envirofit cookstove was provided by the
Colorado-based Paradigm Project, a venture started by Greg
Spencer, the co-founder of Blue Source LLC, a company which
develops and manages projects that reduce carbon emissions,
generating tradable carbon offsets. Spencer, who is 55, wants to
provide 5 million stoves in developing countries by 2020 and is
tapping grants, investor capital and carbon offsets for funding.

Gathering Firewood

“We want to prove that it is possible to do good and make
a profit at the same time,” Spencer said in a telephone
interview. “We have to bring in for-profit capital to reach our
objective.”
Spencer is currently on a 10-day, 136-mile (218 kilometer)
trek from San Diego to Los Angeles with his 26-year-old son,
carrying 50-pound bundles of wood on their backs to raise
awareness of the grueling journey millions of women undertake in
the developing world to gather firewood.
Women are often responsible for collecting firewood and are
more susceptible to smoke-related respiratory diseases because
they do most of the cooking, the IEA’s Birol said. Premature
deaths from indoor air pollution are projected to exceed those
from malaria and the HIV/AIDS virus combined in 2030, and can be
reduced by improving access to cleaner and more efficient stoves
and cooking facilities.
African nations that lack energy reserves face the greatest
challenge in providing energy to their people. Oil import bills
in sub-Saharan Africa increased by $2.2 billion last year,
outpacing gains in development assistance funding, the IEA said.

Using Export Revenue

Oil exporters on the continent such as Nigeria and Angola
could better use their revenue to end energy poverty, according
to the report. The capital cost of providing modern energy
services to all deprived households in the 10 largest oil and
gas exporting countries of sub-Saharan Africa is about $30
billion, or about 0.7 percent of those governments’ cumulative
income from oil and gas exports, IEA data showed.
Wind, sun and hydro power are most likely to solve energy
poverty for people living in rural areas in Africa because the
power sources can be tapped without requiring construction of
large transmission grids, Birol said.
Microfinance institutions may be able to help distribute
and fund the purchase of low-cost sun-powered lamps, according
to a report by the Washington-based Center for Financial
Inclusion. Solar lamps cost between $10 to $100, a significant
expense for many in Africa, said David Levai, an author of the
report.
WillowTree, a Dubai-based investment company, sees business
opportunities in providing solar lamps and stoves in Africa,
according to managing partner Nadine Kettaneh.
“The market opportunity is driven by low grid penetration,
large and growing populations, high energy prices and very low-
income populations,” Kettaneh said. “These are all factors
that contribute to a very attractive market for solar portable
lighting.”
Back in Kenya, solar power is still a dream for Mirangoh.
“I would like to have a solar lamp,” she said. “I have
seen one in a friend’s house.”

For Related News and Information:
Global Energy Statistics: ENST
Top Energy Stories: ETOP

–With assistance from Nguyen Dieu Tu Uyen in Hanoi. Editors:
Stephen Voss, Raj Rajendran

To contact the reporters on this story:
Simon Clark in London at +44-20-7673-2059 or
[email protected]
Lananh Nguyen in London at +44-20-7392-0380 or
[email protected]

To contact the editor responsible for this story:
Stephen Voss at +44-20-7073-3520 or
[email protected]