FUEL & ENERGY POVERTY

A REQUIREMENT FOR HUMAN DEVELOPMENT AND COMFORT IS AFFORDABLE FUEL

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What is fuel poverty? Fuel and energy poverty are linked. Fuel poverty normally applies to home heating, while energy poverty is broader, covering almost anything in the home that requires electricity or other fuel sources needed to sustain modern living.

While seeking to provide energy and fuel for life, we must be wary of global warming from the burning of fossil fuels. This means providing energy or fuel that is renewable and as close to zero carbon as possible. Otherwise, with the drive for electrification and cheap energy for all, we are engineering in warming of the planet - and that we must avoid - for the sake of planet earth and all life onboard.

The ideal is for all new homes to be well insulated and energy self-sufficient, including heat and electricity.

Utopia Tristar RE flatpack timber mobile home designed for the United Kingdom. This is a 20'x18' foot affordable starter home example with a 12 sq/m solar conservatory as part of the roof, which generates 12 kW during periods of intense sunshine. Thus if the sun shines for 6 good hours, you will capture 72kW/hrs of energy. 8 hours will yield 96 kW/hours and so on. Minus of course any losses in efficiency in conversion.  If this mobile home were adapted to be a house, you would not see the pillars. Instead the pillars would be below ground level and could be mounted on a concrete raft, or footings. This design is flood resistant and can even be made to float for tsunami prone regions. All of this cost and customer preference dependent. Copyright © diagrams Climate Change Trust 2013. All rights reserved.

ENERGY POVERTY

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. 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 focuses solely on the issue of affordability.

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. Nearly 1.1 billion people still have no access to electricity, according to the International Energy Agency (IEA)". As a result of this situation, a new UN initiative has been launched to coincide with the designation of 2012 as the International Year for Sustainable Energy for All, which has a major focus on reducing energy poverty.

Energy tariff increases are often important for environmental and fiscal reasons – though 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 - i.e. below the national poverty line. This study also outlines the methodological and statistical assumptions and constraints that arise in estimating causal effects of energy reforms on household poverty, and also discusses possible effects of such reforms on non-monetary human welfare that is more difficult to measure statistically.

EDUCATION

There is a clear link between energy poverty and education. 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. In September 2013 a Lifeline Energy intern undertook research in Lusaka, Zambia to discover if there was a link between energy access and education.

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. 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.

INTERNATIONAL COOPERATION

China and India which account for about one third of global population are growing fast economically and other developing countries would grow economically and in population too. As a result, their energy demand increases much more than now. As the dissemination of modern energy sources in the nations is not effectively progressing, but population in the developing world is growing rapidly. Without a new approach, more people in the developing countries will have difficult to access modern energy services. International development agencies have experienced that many of international society’s attempts 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.”

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 European 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. In 2016 it was reported internationally how several million people in Spain live in energy poverty, causing deaths and also anger at the electricity suppliers' artificial and "absurd pricing structure" to increase their profits.

Energy poverty mostly affects low-income economies and rural areas; electrification is making progress, but clean-fuel development is stagnating. From 2000 to 2016, the number of people without access to electricity dropped by nearly 35 percent, from 1.7 billion to 1.1 billion. During that period, about 1.1 billion people gained access to electricity, exceeding global population growth of 0.6 billion people. India experienced some of the world’s fastest rates of electrification, with an average of more than 33 million people gaining access every year.

By contrast, access to clean cooking fuels did not make significant progress. Over the past two decades, the number of people without fuels for clean cooking remained stagnant at 2.8 billion. Globally, access to non-solid fuel is a more acute problem than access to electricity; in almost every country, the transition to electricity has been faster than to clean cooking fuels.

The International Energy Agency says deploying energy for all would have a very limited impact on energy demand (more than 37 MTOE in 2030) and a small positive impact on climate change (an increase of 70 MT of CO2 emissions by 2030, but an overall reduction of greenhouse gases of 165 MT CO2 equivalent in the same period).

About 95 percent of people who lack access to electricity and non-solid fuels live in sub-Saharan Africa and developing countries in Asia.

The 15 worst-affected nations in terms of the proportion of the population experiencing energy poverty are all in Africa. In these countries, the share of the population living with no access to electricity ranges from 65 to 92 percent, while 95 to 98 percent of people lack access to clean fuels for cooking. But the largest populations suffering from energy poverty are in India and China. In 2016, 239 million people in India did not have access to electricity (accounting for 22 percent of the global population without electricity access). Combined, India and China accounted for 1.3 billion people without access to clean fuel (48 percent of the global population that lacks clean fuel access).

In general, access to electricity and clean fuel varies according to a country’s average economic wealth. In low-income countries, the percentage of the population with access to electricity ranges from 10 to 40 percent, compared with 40 to 80 percent in lower middle-income countries. Only 5 to 30 percent of people in low-income countries have access to clean fuels, compared with 30 to 50 percent in lower middle-income countries.

Given existing policies and investments ($334 billion), the International Energy Agency expects a global reduction in the number of people who lack access to electricity from 1.1 billion in 2016 to 0.7 billion in 2030. Between 2030 and 2040, the reduction will weaken unless further measures are taken. The outlook for access to non-solid fuels is even worse. The global population lacking access to modern fuel is only expected to fall by 7 percent between 2016 (2.8 billion people) and 2030 (2.6 billion people). Investments would need to quadruple globally to provide universal access to clean fuel, with about 30 percent of spending allocated to Africa.

GLOBAL ENVIRONMENTAL FACILITY

"In 1991, the Work Bank Group, 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 co-financing, 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, totaling $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."

ETHIOPIA - In a country of approximately 100 million people, roughly 44% of Ethiopians have access to electricity. Ethiopia’s National Electrification Program 2.0 aims to fill this electricity access gap: by ensuring 100% access by 2025.

FUEL POVERTY IN ENGLAND & WALES

Until recently, the usual definition of fuel poverty was that a household was considered to be in fuel poverty when it needed to spend more than 10% of its income on fuel – or energy as it is often called.

However, in June 2013, the Department for Energy and Climate Change (DECC)* published 'A framework for future action’ which set out the Government’s intention to adopt a new definition of fuel poverty for England.

This new definition states that a household is said to be in fuel poverty if:

a) They have required fuel costs that are above average (the national median level), and

b) Were they to spend that amount they would be left with a residual income below the official poverty line.

This also uses a fuel poverty gap - i.e. the difference between a household’s 'modelled' (average) bill and what their bill would need to be for them to no longer be fuel poor.

Read the Department for Energy and Climate Change's Fuel Poverty framework for future action

* DECC was closed on 14 July 2016 by the Prime Minister Theresa May. Energy issues will now be covered by a new department called Business, Energy and Industrial Strategy.

Key fuel poverty factors

The key factors that can contribute to fuel poverty are:

- The energy efficiency of the property (and therefore, the energy required to heat and power the home)

- The cost of energy

- Household income.

Number of households in fuel poverty is rising

The number of households experiencing fuel poverty is rising at the moment for several reasons:

The cost of energy keeps increasing, which means we need to spend more of our income on paying these bills

Many of us live in draughty homes, from which lots of heat escapes, and rely on heating systems that are old and inefficient. And because we do not have much money to spare, it is difficult to make our homes more energy efficient, which would reduce our bills

The general cost of living is rising and this is also putting pressure on our finances so we have less money to go around. 

AFRICA & INDIA - In 2015 a world report concluded that 1.3 billion people were living in the dark. Rather than looking at this as a problem, we might take the alternative view that this is an opportunity to build a sustainable off-grid supply network using only renewables - so ensuring that what might be perceived as more strain in terms of climate change, might be prevented. We might achieve this with mobile units to begin with, until the affected regions have time to build permanent networks with installed wind and solar energy generators.

You might argue that they are the lucky ones. If they do not get on the development merry-go-round, they have nothing to lose. Once you join the rat-race it is hard to go back to less energy intensive living. There is an argument for not forcing change on tribes who are perfectly happy as they are.

MOBILE SOLAR & WIND POWER - Ideal for villages in Sub-Saharan Africa where electricity is scarce, and tsunami devastated regions in Asia for emergency supplies, units like this can provide stand-by electricity or instant power where none exists at the moment. This is another solution to potential world challenges from the Cleaner Ocean Foundation and Climate Change Trust. The vehicle shown is part of an experiment in connection with river and ocean cleaning vehicles on water.

Providing clean, sustainable, and affordable energy to all is a priority for governments around the world and is one of the United Nations’ Sustainable Development Goals for 2030. In 2016, 1.1 billion people (14 percent of the global population) were without electricity, and 2.8 billion (37 percent) lacked access to clean fuels. Human development and energy use are intrinsically linked: energy is needed to provide for human needs, such as clean air, health, food and water, education and basic human rights; and it is fundamental to the development of every economic sector.

EUROPEAN UNION

It is estimated that more than 50 million households in the European Union are experiencing energy poverty.

Energy poverty is a distinct form of poverty associated with a range of adverse consequences for people’s health and wellbeing – with respiratory and cardiac illnesses, and mental health, exacerbated due to low temperatures and stress associated with unaffordable energy bills. In fact, energy poverty has an indirect effect on many policy areas - including health, environment and productivity. Addressing energy poverty has the potential to bring multiple benefits, including less money spent by governments on health, reduced air pollution, better comfort and wellbeing, improved household budgets, and increased economic activity.

Awareness of energy poverty is growing rapidly across Europe, and the issue is being increasingly integrated within the activities of the European Union, as evidenced by the European Commission’s flagship legislative proposal “Clean Energy for All Europeans” announced on 30th November 2016. As such, it is now more important than ever to build a specialist network of stakeholders working on energy poverty in Europe.

The EU Energy Poverty Observatory (EPOV) is a 40 month project that commenced in December 2016. Its principal mission is to engender transformational change in knowledge about the extent of energy poverty in Europe, and innovative policies and practices to combat it. The creation of an Energy Poverty Observatory is part of the European Commission’s policy efforts to address energy poverty across EU countries. The Observatory aims in particular to:

- Improve transparency by bringing together the disparate sources of data and knowledge that exist in varying degrees across the whole of the EU;

- Provide a user-friendly and open-access resource that will promote public engagement as well as informed decision making by local, national and EU-level decision makers;
Enable networking and facilitate knowledge sharing and co-production among Member States and relevant stakeholders;

- Disseminate information and organise outreach work that will connect and build on existing pan-European and Member State initiatives in the energy poverty domain;

- Provide technical assistance to the widest possible range of interested parties, based on a holistic approach to understanding and addressing energy poverty in the European Union.

Please address any queries about the EU Energy Poverty Observatory to: contact@energypoverty.eu

WIND POWER - Wind, hydro, and solar can supply more than enough power to achieve universal access to electricity. Global access to electricity has accelerated over the past two decades, with growing reliance on coal and hydropower. A wide range of electrification options can help eradicate energy poverty, from small devices deployed locally to utility-scale solutions. All renewable energy sources, including hydro, wind, and solar photovoltaics (PV), offer scalable applications in a range of locations and with a variety of grid connections and power-output capacities.

Harnessing the potential of local renewable resources could end energy poverty in underdeveloped countries. Solar PV and wind have the potential to raise average power consumption per capita to at least 1,000 kWh per year in poor region, solving global energy poverty with no contributions from other energy sources (see figure 5). Small hydropower plants offer another sustainable way of enhancing electrification, especially in rural areas.

DEFINITION OF ENERGY POVERTY

There are several different approaches to define energy poverty and they can be classified as follows:

1. Minimum amount of physical energy necessary for basic needs such as cooking and lighting;

2. Type and amount of energy that is used for those at the poverty line;

3. Households that spend more than a certain percent of their expenditure on energy;

4. The income point below which energy use and or expenditures remains the same, implying this is the bare minimum energy needs. 


Each one of these approaches has strengths and weaknesses.

1. The first way of defining energy poverty has its roots in defining poverty as a minimum amount of food intake necessary to sustain a health life. This is a very common approach often used by international food agencies. Translating this method to energy, there also must be a minimum amount of energy necessary to cook, light and heat someone’s home. Although this might be true, pinning down the exact minimum level of energy necessary based on basis needs is very difficult due to the significant country and regional differences in cooking practices and heating requirements. We know the caloric levels that are necessary to sustain a healthy life, but pinning down the minimum energy needs is much more difficult to accomplish.

2. The second approach of defining the energy poverty line as the energy being used by households below the known expenditure or income poverty line is much easier to grasp. The expenditure based poverty line is well defined in most countries, so based on a household energy survey you assess the average fuel use below this level. This is fairly attractive because it is not necessary to actually measure how much energy people are using. However, this method also has the drawback that you are defining energy poverty based on more general criteria as opposed on an energy basket of goods and services. This means that such a poverty line would not be based on the energy policies in the country, but rather would reflect general economic and social policies. Tracking energy poverty with this method would be no more than tracking general poverty trends. This method is not so useful for those that might want to tack the impact of energy sector reform.

3. The third line of thought is that the energy poverty should be based on the percentage of income spent on energy. It is well established that households that are poor spend a higher percentage of their income on energy than households that are wealthier. Empirical studies including ones I have done indicate that such percentages can range from about 5% or less to close to 20% of cash income or expenditure. It seems that when energy is above 10% of income, then conceivably it will begin to have an impact on general household welfare. The idea is that when households are forced to spend as much as 10% of cash income on energy they are being deprived of other basic goods and services necessary to sustain life. The drawback to this approach is that 10% is a rather arbitrary figure. So it suffers to a certain extent from the same problems as the methods based on physical measures of energy.

4. The last method is based on the level of energy demand as it relates to household income. The sweet spot for poverty specialists is the level of income at which the use of energy or the level of energy expenditures does not vary significantly with income. The converse of this is that after a certain level of income people begin to consume more and more energy. For poor people this means that even if their income increases, their use of energy does not because they are at the bare minimum amount necessary to sustain daily life. Unfortunately, this approach is quite data intensive and requires the analysis of household surveys that have good energy questions. The attractiveness is that this definition of energy poverty is based on how people actually consume energy based on local resource conditions, energy prices and policies.

SOLAR POWER - Electrification solutions range in scope from small local solutions to mini-grid interconnections and national-grid development. Grid-extension (transmission and distribution lines) or micro-grid systems are the most cost-effective solutions for electrification in areas where demand intensity is high. But considerable upfront investments are generally needed, and operation and maintenance costs might also be high depending on local conditions. For less dense urban areas, remote areas, or complex terrains, other off-grid solutions might be cheaper but will generally provide less reliable power services. Further, electrification can follow various progressive paths—from small local solutions and mini-grids interconnections to national grid development.

THE LONG & SHORT OF IT

In the short term we are reliant on fossil fuels to take us into an age of long term energy security. We can thank energy supply companies for that, for making fuel affordable until such time as they switch to cleaner renewable energy is possible. Those companies may want the think about investing in alternatives.

That switch may have to be sooner than any politician thought previously.

Austria - Croatia - Czech Republic - European Union - France

Germany - Ireland - Italy - Japan - Netherlands - Poland Portugal

Slovakia - Slovenia - Spain - United Kingdom

LINKS & REFERENCE

http://energy-transition-institute.com/Insights/EnergyPoverty.html

https://www.seforall.org/

https://energypedia.info/wiki/Energy_Poverty

https://www.energypoverty.eu/relevant-organisations

https://www.energypoverty.eu/

 This website is provided on a free basis as a public information service. copyright © Climate Change Trust 2019. Solar Studios, BN271RF, United Kingdom.