Energy poverty: An overview
Mikel González-Eguino n
Basque Centre for Climate Change (BC3) & Universidad del País Vasco (UPV/EHU), Alameda de Urquijo 4, 4-1, 48008 Bilbao, Spain
a r t i c l e i n f o
Article history:
Received 14 October 2014
Received in revised form
16 January 2015
Accepted 1 March 2015
Available online 30 March 2015
Keywords:
Energy poverty
Energy access
Indoor air pollution
Economic development
a b s t r a c t
In the coming decades the energy sector will have to face three major transformations concerned with
climate change, security of supply and energy poverty. The first two have been extensively analysed, but
less attention has been paid to the third, even though it has a great influence on the lives of millions of
people. This paper presents an overview on energy poverty, different ways of measuring it and its
implications. According to the WHO, indoor pollution causes an estimated 1.3 million deaths per annum
in low income countries associated with the use of biomass in inadequate cookstoves. Although energy
poverty cannot be delinked from the broader, more complex problem of poverty in general, access to
energy infrastructures would avoid its most serious consequences and would help to encourage
autonomous development. According to the IEA, the cost of providing universal access to energy by
2030 would require annual investment of $35 billion, i.e. much less than the amount provided annually
in subsidies to fossil fuels. Finally, the paper argues that energy and energy poverty need to be
incorporated into the design of development strategies.
& 2015 Elsevier Ltd. All rights reserved.
Contents
1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 377
2. Energy and development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 378
3. What is energy poverty?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 379
3.1. Measurements of energy poverty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 380
4. Current situation and trend in energy poverty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 380
4.1. Access to modern energy services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 380
4.2. Energy development indicator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 381
5. Consequences of energy poverty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 382
5.1. Impacts on health . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 382
5.2. Impacts on the economy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 382
5.3. Impacts on the environment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 383
6. Cost of universal access to energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 383
7. Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 384
Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 385
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 385
1. Introduction
In the coming decades the energy sector will have to face three
major transformations, concerned with energy security, climate
change and energy poverty. The first two have been extensively
analysed (see [16,4,18]), but less attention has been paid to the
third in terms of both research and its inclusion on political
agendas [6]. The UN’s Millennium Development Goals [32] –
whose objective is to eradicate extreme poverty, improve living
conditions and facilitate progress towards sustainable development
– do not include any mention of access to energy. Nor qhas
this issue been mentioned to date (see [28]) in the context of
the United Nations Framework Convention on Climate Change
(UNFCCC).
Contents lists available at ScienceDirect
journal homepage: www.elsevier.com/locate/rser
Renewable and Sustainable Energy Reviews
http://dx.doi.org/10.1016/j.rser.2015.03.013
1364-0321/& 2015 Elsevier Ltd. All rights reserved.
n
Corresponding author. Tel.: þ34 94 401 4690.
E-mail address: mikel.gonzalez@bc3research.org
Renewable and Sustainable Energy Reviews 47 (2015) 377–385
This paper seeks to provide an overview of the energy-related
aspects of poverty, a concept which has come to be known as
“energy poverty” (see [14]). There are many different views to be
found in the existing literature, but here the problem is approached
in a way that at least enables the most significant elements of it to
be identified. We analyse the current situation as regards energy
poverty, its future prospects and its current impacts. Although
energy poverty affects many different economic sectors and hampers
environmental protection efforts, its most relevant (and perhaps
least known) repercussion is its impact on health: according to
the WHO it currently causes more deaths than malaria or tuberculosis.
The paper ends with an analysis of the possibilities of
providing universal access to energy.
Although it is difficult to separate energy poverty from the
broader, more complex problem of poverty in general, this article
do not seek to examine the underlying causes and consequences of
poverty. Nor is the paper intended to analyse the various technological
options available for providing access to energy or indeed
to assess ongoing projects [40]. The attention is focused rather on
poor1
countries, and particularly on energy poverty in the sense of
a lack of access to energy. The particular features displayed by
energy poverty in wealthier countries (“fuel poverty”, see [15])
therefore lie outside the scope of the study.
The paper is organised as follows: Section 2 examines the link
between energy consumption and economic development. Section
3 defines the concept of energy poverty and outlines the various
ways in which it is measured. Section 4 analyses the current
situation and trend as regards energy poverty. Section 5 then looks
at the impacts of energy poverty on health, the economy and the
environment, and Section 6 analyses the cost of providing universal
access to energy. Section 7 concludes.
2. Energy and development
Energy consumption and economic development are closely
linked (see for example, [20] or [9]). The basic macro-economic
indicators of a country generally include energy and electricity
consumption, number of vehicles and, lately, per capita CO2
emissions. Table 1 shows indicators related to development and
energy for nine representative countries. Observe that the human
development index (HDI), life expectancy at birth and gross
domestic product (GDP) per capita are all closely related to energy
consumption. For instance, Germany and the USA, which have
very similar HDI scores (0.92) and life expectancy levels (80 and 78
years, respectively), also have high per capita energy consumption
levels (in excess of 4 t of oil equivalent (toe) per person per
annum). By contrast, India, Nigeria and Ethiopia, whose HDI scores
(0.55, 0.47 and 0.39, respectively) and life expectancy (below 65
Table 1
Energy and development indicators, 2010.
Source: World Bank [41].
HDI Life expectancy
(years)
GDP per capita
($, PPC)
Electricity consumption
per capita (kW h)
Energy consumption
per capita (tep)
Passenger cars
(per 1000 people)
CO2 per
capita (t)
United States 0.92 78.2 46.612 13.394 7.1 632 19.7
Germany 0.92 80 37.652 7.215 4.0 510 9.8
Saudí Arabia 0.78 73.9 22.747 7.967 6.1 139 16.5
Russia 0.78 68.8 19.940 6.452 4.9 233 11.3
Brazil 0.73 73.1 11.180 2.384 1.3 178 1.9
China 0.69 73.3 7.553 2.944 1.8 35 4.4
India 0.55 65.1 3.366 616 0.5 12 1.2
Nigeria 0.47 51.4 2.367 137 0.7 31 0.7
Ethiopia 0.39 58.7 1.033 54 0.4 1 0.1
Fig. 1. Electricity consumption, 1960–2010, kW h per capita. .
Source: World Bank [41]
Fig. 2. Human development index and energy consumption, 1995–2008.
Notes:
(1) HDI: human development index; PEC: primary energy consumption.
(2) AUS: Australia; BRA: Brazil; CHN: China; DEU: Germany; ESP: Spain; FRA:
France; GBR: United Kingdom; IND: India; ITA: Italy; JPN: Japan; MEX: Mexico;
POL: Poland; RUS: Russia; SWE: Sweden; USA: United States of America.
(3) The vertical blue dotted line represents the threshold of the minimum energy
to achieve a HDI40.8 for the set of countries and years analysed (i.e. Malta
2000, with PEC of 74 GJ/cap and HDI of 0.801). Countries above the horizontal
line are classified as developed countries (i.e. HDI40.8), otherwise they are
considered as developing countries.
(4) GDP per capita in US$, constant prices of 2008.
Source: Arto et al. [2]. (For interpretation of the references to color in this figure
legend, the reader is referred to the web version of this article.)
1
The UN distinguishes between less economically developed countries
(LEDCs) and more economically developed countries (MEDCs). We use “poor
countries” to refer to LEDCs countries.
M. González-Eguino / Renewable and Sustainable Energy Reviews 47 (2015) 377–385378
years) are much lower, also have low levels of energy consumption
(below 0.7 toe).
As countries progress their energy consumption increases. Fig. 1
shows the trends in electricity consumption from 1970 to 2010 for a
number of countries. One of the most spectacular increases is that of
China, where the figure rose from 150 kW h per capita in 1970 to
3000 in 2010, i.e. 20 times more. However, in some African countries
where there has been little or no economic progress energy
consumption has hardly increased at all: for instance in Ethiopia
consumption is up from 18 kW h per person in 1970 to 58 in 2010.
Per capita electricity consumption in Ethiopia is currently 250 times
lower than in the United States. The economic inequalities that exist
around the world are reflected in similar inequalities in energy
consumption. It is worth pointing out that the link between energy
consumption and development also works in the opposite direction:
energy consumption tends to decrease at times of economic recession.
This can be seen easily in Fig. 1 in the case of Russia during its
transition to a market economy: GDP dropped by almost 30%, and
energy consumption decreased accordingly.
Fig. 2 shows the statistical link between development and
energy. Each point represents the HDI and the energy consumption
of a country. The size of the point indicates the relative size of
the population. In general, almost all the countries with high or
very high HDI scores also have high energy consumption levels.
However, it is also possible to have a high HDI with very different
levels of energy consumption, as shown by the broad horizontal
spread found in the data. Moreover, beyond a certain level of
consumption the link seems to curve, indicating that there is a
threshold beyond which HDI and energy consumption are no
longer linked.
Although a strong link has been seen to exist between energy
consumption and development, two important nuances must be
noted. The first is that in energy exporting countries the link may
be highly distorted as a result of high levels of subsidies on energy,
especially on energy from fossil fuels. For instance in Saudi Arabia
and in Russia, electricity consumption per capita is higher than in
Germany even though standards of living are lower (see Table 1).
The second is that government policies have a considerable impact
on levels of energy consumption. For instance, in the USA energy
and electricity consumption per capita is almost twice as high as in
Germany. This difference cannot be explained in terms of economic
structure or indeed geographical or climate-related factors,
but for the policies implemented, especially energy and urban
policies [21].
In conclusion, energy consumption is necessary, but not sufficient
in itself, for development. Moreover, as from a certain level of
development the policies implemented are decisive in determining
whether standards of well-being can be increased or maintained
without increasing energy consumption. In any event, the
clearest way of understanding the importance of energy consumption
is to analyse the implications of energy poverty.
3. What is energy poverty?
There are many different definitions and visions of energy poverty,
but they all refer to a level of energy consumption that is insufficient
to meet certain basic needs. According to Reddy [26], energy poverty
can be defined as “the absence of sufficient choice in accessing
adequate, affordable, reliable, high-quality, safe and environmentally
benign energy services to support economic and human development”.
This definition is selected here because it incorporates a
number of interesting elements and nuances (see also [3]).
First of all, it refers to the absence of choice. According to Sen
[29], development is not so much a question of achieving a certain
level of income (or energy per capita in our case) as, first and
foremost, not being excluded from those options that enable us to
choose and obtain welfare in its broadest sense. Not having access
to energy may mean being deprived not only of basic services such
as cooking and home heating, for instance, but also other elements
which are fundamental for individual and collective development,
such as access to education, health, information and participation
in politics. A lack of capability or choice may, as can be seen, affect
elements that are essential for participation in and control of
institutions, and when they do not serve the general interest there
is unlikely to be genuine development [1].
Second, the definition stresses the idea of meeting demand for
“energy services”. Although it may seem obvious, it is worth
recalling that the goal is not energy consumption per se but rather
the provision of energy services from the various sources of
energy. Primary energy sources (coal, oil, gas, biomass, etc.) are
processed, and energy is stored and distributed via various energy
“vectors” (heat, electricity and solid, liquid or gaseous fuel) to
provide the various energy services that are really need: cooking,
heating, cooling, lighting, transportation, work and access to
information and communication technologies (“connectivity”).
The make-up of the primary energy sources and energy vectors
used may vary widely depending on geographical characteristics
and on the energy policy implemented in a given country, but the
energy services demanded are very similar all over the world.
In general, wealthier countries tend to have various sources
available, while in poorer countries (and particularly in rural areas
within those countries) there may be few alternatives or indeed
none at all. The most widely used primary energy source in poorer
countries tends to be wood. Bailis [3] shows the various energy
sources used for cooking in different African countries, divided
according to wealth quintiles. In the cases of Burkina Faso and the
Central African Republic the only choice is between burning wood
or charcoal. Elsewhere, e.g. in Kenya and South Africa, gas and
electricity are more widely available. There are also fewer options
for poorer people (the first quintile), who generally live in rural
areas, than for the wealthier, generally urban-dwelling population
(the fifth quintile).
Third, the definition identifies certain desirable characteristics
of the technologies used to access energy services. Those technologies
need to be “adequate”, i.e. suited to the geographical
characteristics, knowledge base and culture of each area. It is
well-known that development aid projects may fail if they simply
try to replicate the use of the same technologies in different
locations without taking the particular features of each region or
community into account.
Technologies must also be “affordable”, i.e. as cheap as possible
compared to the alternatives available. In general, as average
household income levels rise fuel sources such as biomass tend
to be replaced by sources such as kerosene, oil and, ultimately,
electricity (see table), which is the cleanest, most versatile energy
vector of all. This is known as the “energy ladder” theory [36], and
it posits that low-quality fuels are displaced by higher-quality,
more versatile fuels as income increases.
One major caveat that must be taken into account in energy
ladder theory is that low-quality fuels are not (as generally
believed) always the cheapest: all too often they are simply the
only option. A study conducted in Guatemala [13] has shown that
sometimes, especially if what is measured is the cost per unit of
energy service and if the opportunity costs involved in collecting
wood are taken into account traditional fuel sources may even be
more expensive. The lack of alternatives means that poor people
consume energy that is not only of lower quality but also more
expensive.
Finally, insofar as possible, technologies need to be “reliable”, i.e.
not subject to continual breaks in service (in many countries power
cuts lasting for several hours a day are commonplace) and “safe”, i.e.
M. González-Eguino / Renewable and Sustainable Energy Reviews 47 (2015) 377–385 379
not liable to endanger health. The definition also mentions that
technologies should be “environmentally benign”, i.e. that they
should not compromise future generations. It is important for
technological solutions intended to reduce energy poverty to take
into account impacts on climate change and on the environment so
that development can be maintained in the future. Moreover, as
indicated in the definition, the purpose of energy use is “to support
economic and human development”, so the mere fact that energy
resources exist and that there is economic activity associated with
their extraction does not guarantee that there will be development
in general or indeed energy development.
3.1. Measurements of energy poverty
Energy poverty can be measured using three alternative but
complementary approaches (see [24]). These approaches focus on
access to energy according to a technological, physical or economic
threshold:
À Technological threshold: this approach is based on the idea that
energy poverty is first and foremost a problem in accessing
“modern” energy services. This term is considered to mean
electricity and sources other than biomass for cooking and
home heating. Traditional energy sources, as shown, limit or
hamper access to many basic energy services. From this viewpoint,
energy poverty is measured by counting the population
with no access to such services. According to the IEA, in 2012
there were 1.3 billion people with no access to electricity, and
2.7 billion who depended on biomass for cooking. The main
limitation of this indicator is that it provides no information on
levels of consumption.
À Physical threshold: this approach estimates minimum energy
consumption associated with basic necessities. Anyone found
to be below that threshold is considered to be suffering from
energy poverty. This is similar to the approach used by the
World Bank to estimate absolute poverty levels2
. The problem
lies in the difficulty of defining just what a “basic necessity” is,
and in whether or not energy used for production is included. If
the threshold for basic necessities (see Table 2) is set at
100 kW h in terms of electricity consumption and 150 l of gasoline
per person per annum (equivalent to 5 GJ), then 1.8 billion
people were unable to cover their basic energy consumption
requirements in 2009 (27% of the world’s population). A further
1.6 billion (24% of the population) consumed double that amount
(10 GJ), but were still well below the consumption levels of
emerging societies (25 GJ) and the average consumption, for
instance, in the European Union (75 GJ).
À Economic threshold: this approach seeks to establish the maximum
percentage of income that it is reasonable to earmark for
energy spending. It is similar to the approach used by developed
countries to measure relative poverty in general. This is
the most widely used system for measuring energy poverty in
developed countries, where the problem is concerned more
with purchasing power, energy prices and the difficulty of
maintaining adequate temperature levels in the home, especially
in winter (“fuel poverty”). The UK, a pioneer in such
studies, where official statistics have existed since 1996, sets a
percentage of 10% of available income. In 2010 there were
4.7 million homes in the UK [15] below this threshold (19% of
the population). The problem with such thresholds is that they
are relative in nature, which makes it difficult to draw comparisons
between countries with different economic situations.
4. Current situation and trend in energy poverty
4.1. Access to modern energy services
As indicated, in 2010 there were almost 1.3 billion people with
no access to electricity, and around 2.6 billion who used biomass
to meet their basic energy needs. 95% of those with no access to
electricity live in Asia and sub-Saharan Africa, as can be seen in
Table 3. In terms of numbers there are more people with no access
in Asia, because of the size of the population, but the level of
access is generally lower in sub-Saharan Africa. There are also
areas without access to these services elsewhere, e.g. Latin
America, the Middle East and North Africa, but in comparative
terms the size of the population affected is small and access levels
in general are higher. Everywhere else access is almost universal,
except in remote, rural areas.
It is striking to note that just 10 countries, four of them in Asia
(India, Bangladesh, Pakistan and Indonesia) and six in Africa
(Nigeria, Ethiopia, the Democratic Republic of the Congo, Tanzania,
Kenya and Uganda) account between them for 63% of all the
people with no access to electricity (see the right-hand side of
Fig. 3). The largest number can be found in India, with 293 million,
followed by Bangladesh with 88 million and Nigeria with 79
million. However, the lowest levels of access to electricity are
found in countries such as Malawi (9% of the population), Uganda
(9%), the Democratic Republic of the Congo (11%), Mozambique
(11%), Myanmar (13%) and Afghanistan (15%). In Latin America, the
level of 38% found in Haiti is far lower than in the second worse
case, which is Nicaragua with 72%. Most countries in North Africa
and the Middle East have universal access, e.g. the United Arab
Emirates, Kuwait, Lebanon and Jordania.
Just three countries – India, China and Bangladesh – account for
half of all the people of the world with no access to modern
cooking facilities (see Fig. 4). If Pakistan, Indonesia, Vietnam and
the Philippines in Asia, along with Nigeria and the Democratic
Republic of the Congo in Africa are added to the equation the
figure rises to 75%. Once again, the numbers are greater in Asia but
it is in sub-Saharan Africa where the level of access is lowest.
Levels of access to modern cooking facilities are close to zero in
Liberia, Zambia, Malawi, Namibia, the Democratic Republic of the
Congo, Myanmar, Nepal and Bhutan. In Latin America the lowest
levels of access are found in Nicaragua (3%), Honduras (4%) and
Haiti (5%). Access is almost universal, however, in northern African
Table 2
Energy poverty by physical threshold.
Source: Adapted from [7].
Thresholds Energy consumption
(cap year)
Energy consumption
(GJ/cap year)
Population (%
total)
Basic human
needs
100 kW h þ150 l
(ffi 5 GJ)
o5 GJ 1800 (27%)
Productive
uses
750 kW h þ220 l
(ffi 10 GJ)
5–10 GJ 1600 (24%)
Modern
Society
2000 kW h þ550 l
(ffi 25 GJ)
10–25 GJ 1500 (22%)
European
Union
Average UE (ffi 75 GJ) 25–75 GJ 1300 (19%)
United States Average USA
(ffi 150 GJ)
475 GJ 600 (7%)
2
In 2008 there were 2.47 billion people living below the poverty line (on less
than two dollars per day) and 1.29 billion living below the extreme poverty line (on
less than $1.25 per day).7
M. González-Eguino / Renewable and Sustainable Energy Reviews 47 (2015) 377–385380
and Middle Eastern countries such as Iran (100%), Jordan (99%) and
Algeria (98%).
These figures do not reflect the differences that exist within
countries, particularly between urban and rural areas. Eight out of
every ten people with no access to modern energy services live in
rural areas. Geographical barriers and scattered populations are
determinant factors when it comes to providing access to basic
energy services in rural areas. Major gaps may also exist at provincial
level. In India, for instance, there are notable differences: 85% of the
homes in Odisha have no access to modern cooking facilities,
compared with 40% in Punjab.
4.2. Energy development indicator
The energy development indicator (EDI) combines data on
access to and consumption of energy in a single index, covering
the period from 2002 to 2010. The EDI has its limitations (see [22])
but its coverage is broad (80 countries). It is measured on a scale
from 0 to 1, where 0 is the minimum level of energy development
and 1 is the maximum. It is broken down into four sub-indicators3
:
(1) access to electricity; (2) access to modern fuel for cooking;
(3) access to energy for public services; and (4) access to energy
for production services. Each sub-indicator covers a specific aspect
of energy development, and between them they provide a general
indication of the energy development level of a country.
Fig. 5 shows the results broken down by sub-indicators for a
selection4
of 20 countries in 2010. Just as energy poverty is found
to be concentrated mostly in sub-Saharan Africa and in Asia, this
graph shows that energy development is located mainly in Latin
America and the Middle East, especially in countries with energy
resources. Most Latin American countries have medium to high
EDI levels, with the exception of Haiti, Nicaragua and Guatemala.
However, with the exception of South Africa, most countries in
sub-Saharan Africa have low or very low EDI levels.
Fig. 5 shows the EDI obtained for 2002 and for 2010 beside the
name of each country, thus enabling trends to be analysed. These
data show that global energy development improved over this
period, as the overall EDI rose from 0.392 0.43. In fact, EDI levels
improved over the period in all countries except Iraq and Cote
d’Ivoire. Four of the 10 countries with the biggest improvements are
located in Asia (China, Thailand, Vietnam and Malaysia), three in
Latin America (El Salvador, Argentina and Uruguay), one in the
Middle East (Jordan) and two in North Africa (Algeria and Morocco).
Table 3
Number of people without access to “modern” energy access, 2009 (millions).
Source: [16].
Lacking access to
electricity
Relying on the traditional use of
biomass for cooking
Population (% Total) Population (% Total )
Asia 628 18% 1814 51%
Sub-Saharan Africa 590 57% 698 68%
Latin America 29 6% 65 14%
Middle East 18 9% 10 5%
North of Africa 1 1% 2 1%
Total 1267 19% 2588 38%
Fig. 3. Population lacking access to electricity, 2009 (millions). .
Source: [16]
Fig. 4. Relying on the traditional use of biomass for cooking, 2009 (million). .
Source: [16]
Fig. 5. IDE for 20 selected countries, 2002–2008. .
Source: [16]
3
These sub-indicators in turn combine data on access to and consumption of
energy. For instance, the “access to electricity“ sub-indicator gives a weighted
figure for access to electricity and electricity consumption per capita. The overall
EDI is obtained as the arithmetic mean of the four sub-indicators.
4
We have selected the countries to have a good representation of different
regions. In any case, the full list can be found in the IEA database.
M. González-Eguino / Renewable and Sustainable Energy Reviews 47 (2015) 377–385 381
One of the biggest increases in IDE took place in China, thanks to
improvements in access to electricity. Access to electricity in China is
now practically universal, and various programmes have resulted in
the installation of more than 40 million bio-gas cookers in rural
areas. According to the IEA, most of the improvement in Thailand is
attributable to growth in public investment. There was also a
significant improvement in Vietnam thanks to various electrification
programs in rural areas, which increased the electrification level to
98%. Latin American countries such as El Salvador, Brazil and
Ecuador also made substantial progress. Finally, although in percentage
terms the progress made was less, in India millions of people
gained access to electricity over the course of the 10 year period
studied, especially in urban areas. In Ghana access to electricity
improved considerably, and the country has set a target of attaining
universal access to electricity by 2020. However, around 40% of
homes currently still use wood for cooking.
In spite of the general improvement observed, many countries
with low EDI levels made little or no progress. Ethiopia, for
instance, continues to have the lowest EDI of all (up from 0.02 to
0.04). Moreover, although some oil and gas-rich countries show
generally high EDI levels (e.g. Venezuela and Iran) the same cannot
be said for most African countries (e.g. Angola, Chad and Sudan).
5. Consequences of energy poverty
5.1. Impacts on health
As mentioned previously, energy use in many homes in poor
countries is characterised by the use of biomass (wood, coal, dung
and waste material) for cooking and heating. These fuels are
normally burned directly in the home in clay, brick or metal
cookers. Lighting requirements are also met largely by the use of
candles and, to a lesser extent, kerosene lamps.
This type of energy use has substantial effects on health, as it is
associated with high levels of pollution due to inefficient combustion
and poor ventilation in homes. Indoor air pollution is characterised
by higher than advisable levels of carbon monoxide,
aromatic compounds and suspended particles. The suspended
particles tend to comprise ash, soot and metal elements, and tend
to be extremely fine. Particles with diameters of less than 10 mm are
referred to as PM10, and those with diameters of less than 2.5 mm as
PM2.5. When inhaled, PM10 easily penetrate the respiratory system,
causing damage to health, particularly if the compounds are formed
by toxic elements such as heavy metals. Moreover, PM2.5 can be
deposited in the deepest parts of the respiratory system, where their
effects may be even more severe.
The World Health Organisation (WHO) estimates that PM10
concentrations in these homes may vary from day to day between
303 and 3000 μg/m3
, and may on occasion be as high as
10,000 μg/m3
. These levels are extremely high in comparison to
the maximum levels permitted for outdoor air pollution. For
instance the European Union has set an average annual limit
figure of 40 μg/m3
. Indoor pollution is thus far higher than
outdoor pollution in the world’s most highly polluted cities [37].
Moreover, those exposed to it are mostly women, children, the
elderly and the infirm, as they spend more hours per day in
the home.
Medical studies have spent decades analysing the effects on
health of high, prolonged exposure to indoor pollution. It is now
known that fine particles are responsible for numerous respiratory
and cardiovascular diseases and cases of lung cancer. The WHO
[38] considers that indoor air pollution doubles the risk of
pneumonia and other acute infections of the respiratory system
in children under five. Women are three times more likely to
suffer obstructive pulmonary diseases such as chronic bronchitis
and emphysema, and twice as likely to suffer lung cancer.
In its latest Global Health Risk report [38], the WHO calculates
the number of deaths and the loss of disability-adjusted life years
(morbidity) attributable to 22 risk factors. In poor countries (see
Table 4) indoor pollution is estimated to cause 1.3 million deaths
per year, making it the sixth highest risk factor. It is ranked well
behind factors such as infant malnutrition (2 million deaths per
year) and the lack of drinking water and drainage (1.7 million), but
it is well ahead of other causes of death. At global level, indoor
pollution results in 2 million deaths per year, but is only the ninth
highest risk factor because in high-income countries its incidence
is zero. In terms of disability-adjusted life years (DALYs5
), indoor
pollution is the fifth highest risk factor, because its impact is
especially prolonged: it affects younger people and gives rise to
chronic illnesses. It is estimated that indoor pollution causes the
loss of 33 million DALYs, making its impact greater than that of
vitamin A deficiency (20 million) and zinc deficiency (14 million),
which mainly affect the early stages of infant development.
Finally, Fig. 6 compares the number of deaths caused by various
diseases with those caused by indoor pollution. The results show
that more people die from indoor pollution than from malaria and
tuberculosis. In fact indoor pollution is second only to HIV/AIDS.
The OECD also expects the number of deaths from indoor pollution
to increase slightly, so that they may actually overtake deaths from
HIV/AIDS in the not too distant future (see [23]). The expectation is
that income and the use of modern energy services will both
increase in many countries, but that improvement will be insufficient
to offset the increase in population unless specific measures
are taken.
5.2. Impacts on the economy
Energy poverty affects all production sectors and limits potential
for development. For instance in agriculture, a highly important
sector, the energy input in poor countries is very low and
comes mainly from animal and human labour. By contrast, in rich
countries there are high levels of direct energy input (machinery
and fuel) as well as indirect inputs (chemicals and fertilisers). In
the USA, for instance, nitrogen-based fertilisers account for 45% of
all the energy input in the process of producing corn, while
physical labour accounts for just 3% [12]. According to the FAO,
low levels of fertiliser use are one of the reasons for low crop yield,
which means that poor countries find it harder to progress along
this economic development path.
Table 4
Risk factor causes of death for low income countries, 2004.
Source: WHO [38].
Risk factor Deaths (millions) Percentage of total
1 Childhood underweight 2.0 7.8
2 High blood pressure 2.0 7.5
3 Unsafe sex 1.7 6.6
4 Unsafe water, sanitation, hygiene 1.6 6.1
5 High blood glucose 1.3 4.9
6 Indoor smoke from solid fuels 1.3 4.8
7 Tobacco use 1.0 3.9
8 Physical inactivity 1.0 3.8
9 Suboptimal breastfeeding 1.0 3.7
10 High cholesterol 0.9 3.4
5
DALY is the acronym for “Disability—Adjusted Life Year“ and measures the
years of 'healthy' life lost due to death or disease, measured as the difference
between the actual health status and the ideal situation (where “ideal” is understood
as if everyone would live until the global life expectancy free of disease and
disability).
M. González-Eguino / Renewable and Sustainable Energy Reviews 47 (2015) 377–385382
On the other hand, even slight improvements in access to and
consumption of energy may have a substantial impact. In education,
for instance, statistics show that populations with higher levels of
access to electricity and better street lighting have higher literacy
rates, lower drop-out rates and devote more time to reading and
studying (see [19]). In the field of health, the availability of transport is
often a determining factor in the provision of effective medical
treatment in good time. And although the idea may seem like wishful
thinking for poorer countries, access to information and communication
technologies could encourage the formation of micro-businesses,
enable people to access high-quality training courses free of charge
online and encourage empowerment in society. It is hard to measure
the impact of energy infrastructures on development, but it is clear
that in their absence it is not possible to take advantage of the
potential offered by energy in combination with new technologies.
Finally, it is important not to confuse the existence of energy
resources and a powerful extraction and exporting industry with
the reduction of poverty and energy poverty. Indeed, in most
countries an abundance of resources has historically been linked
to low levels of growth, in what is known as the “natural resource
curse” (see [27]). Between 1970 and 1993 economic growth in
countries without natural resources was, on average, four times
greater than in resource-rich countries, even though public revenue
was twice as high in the latter. In some oil-producing
countries, e.g. Iran and Venezuela, public sector revenue has been
used to encourage energy consumption6
. However, it is not clear
whether the subsidies provided really reach the poorest sectors of
society, or whether they can be maintained over time. The
situation in the oil-exporting countries of sub-Saharan Africa is
clearly worse: high levels of income from oil and gas exports
coexist with extreme levels of poverty in general and energy
poverty. For instance, Angola has been drilling for oil since the
1970s, and oil revenue accounts for a high percentage of the
country’s GDP, but even so there has been very little progress for
most people. Currently, 91% of the population of Angola are
dependent on biomass, and only 9% of the rural population have
access to electricity. Even in countries such as Gabon, whose per
capita GDP and HDI levels are among the highest in Africa, levels
of access to modern energy sources remain very low compared to
developed countries.
5.3. Impacts on the environment
Energy poverty and the environment are linked mainly through
land use change. As indicated above, traditional biomass provides
the main source of energy for the poorest people, and its overexploitation
increases deforestation, desertification and landdegradation.
However, detailed studies in many areas around the
world have documented that the main cause of deforestation is
not the consumption of traditional biomass, as sometimes is
assumed, but the expansion of farmland for crops and livestock
and illegal logging. According to a recent assessment traditional
biomass o fuelwood collection only account for around 6% of
global deforestation [31].
Therefore, and although it is true that energy poverty can affect
negatively the environment in reality the causality goes more in the
other direction; so a lack of policies to protect woodland may also
endanger the only energy source available to the poor, thus exacerbating
their existing energy poverty [11]. Moreover, the loss of
woodland has significant implications for the populations in question:
not only do they lose firewood but many of the services
provided by the relevant ecosystems will vanish with them, including
sources of food and water, thus forcing populations to migrate.
The same happens with climate change. Although from a global
viewpoint the loss of forest will reduces CO2 absorption capacity
and will exacerbate the climate change, the impact of this problem
will be felt first and hardest in the poorest, most vulnerable
countries, which have not contributed almost at all historically
to this problem [25].
6. Cost of universal access to energy
According to the International Energy Agency ([16], Energy for
All), universal access to modern sources of energy could be
achieved by 2030 for a total investment of around $979 billion,
which works out at an average annual investment of between $30
and 35 billion from 2010 to 2030. Actual global investment in 2010
was just $9 billion.
An idea of the economic effort entailed by these investments
can be obtained by comparing the relevant figures with macroeconomic
variables, with figures for the energy sector itself or with
official aid for development. The annual investment required to
finance universal access to energy is equivalent (according to 2012
data) to 0.05% of the world’s GDP, or to 0.08% of the GDP of the
OECD countries. This investment represents an average contribution
of around €5 per person per annum at global level, or €25 per
person per annum if it is funded entirely by OECD countries.
A look at the energy sector reveals that the investment required
amounts to around 3% of the sum invested by the sector globally
each year. According to the IEA this is equivalent to an increase of
approximately 2% in electricity bills in OECD countries. The IEA
also indicates that worldwide subsidies awarded to fossil fuels in
2012 totalled $544 billion7
, of which 68 billion corresponded to
wealthy countries. This comparison is significant because at the G
20 summit in Pittsburgh in 2009 wealthy and emerging countries
alike undertook to reduce those subsidies in line with the goals of
energy efficiency, security of supply and mitigation of climate
change. Moreover, the subsidies do not generally filter down to
poorer homes and tend to be regressive. According to the International
Monetary Fund [17], only 7% of subsidies in developing
countries actually reach the poorest 20% of the population, while
43% end up in the hands of the richest 20%. However, as shown in
Fig. 7, subsidies have increased considerably since 2009, driven by
rising fossil-fuel prices and social pressure in Middle Eastern and
North African countries. Some authors (see [28]) propose as an
alternative that a fund for energy poverty should be set up based
Fig. 6. Premature annual deaths (millions) from household air pollution and other
diseases. .
Source: [23]
6
EDI in 2010: Venezuela (0.84), Iran (0.76).
7
According to the IMF the impact of subsidies is much greater if losses in
public revenue are taken into account. Including tax losses, the overall amount may
be as much as $2 trillion, 8% of the public sector budget.
M. González-Eguino / Renewable and Sustainable Energy Reviews 47 (2015) 377–385 383
on the introduction of a tax on oil by OPEC countries, which would
transfer the cost of the programme to the countries which
consume most energy, generally the wealthiest countries.
Finally, compared with development aid this investment is
high: in 2012 OECD countries gave a total of US$125 billion in
official development aid, which means that 30% of the annual
amount of that aid would be required to attain the objectives set.
This highlights how modest the contribution made by wealthy
countries is in relation to the size of their economies. Development
aid currently averages 0.29% of gross national income, a long way
from the 0.7% agreed at the UN in 1970. That figure is currently
only met by the Netherlands, Denmark, Norway, Sweden and
Luxembourg.
It is also important to stress that not all the investments
required to forestall the worst effects of energy poverty involve
technology or the construction of large, expensive infrastructures.
Educational programmes to teach people the best way to use
biomass in the home may be an effective, inexpensive way of
reducing the worst damage to health, and may entail no more than
simple actions such as improving combustion in cookers and
ventilation in homes. Similarly, micro-funding and/or joint funding
programmes have worked well in other areas of development,
and could possibly also be applied here. According to Wilkinson
et al. [39], a programme to introduce 150 million modern cookers
into India in 10 years would reduce emissions of fine particles by a
factor of 15 and associated deaths by 2 million. Such a programme
would cost $8.2 billion, which works out at less than $10 per
annum per home.
7. Conclusions
Poverty is a fact of life for millions of people, and energy poverty
is both a cause and consequence of it. Almost 1.3 billion people (a
fifth of the world’s population) have no access to electricity and
almost 2.6 billion use wood as their sole source of energy, particularly
in rural areas. Moreover, many more millions who do have
access to infrastructures are unable to meet their basic energy needs
because they cannot afford to pay for energy. The poverty and
inequality in the world is also reflected in high levels of energy
poverty and in inequalities in energy consumption. In the past 10
years there has been appreciable progress in energy development,
particularly in China, where almost universal access to electricity has
been achieved in a very short time, but in many countries in subSaharan
Africa there has been little or no improvement, and still less
than 15% of the population have access to electricity.
Energy poverty has significant implications. First of all, many
basic energy needs such as cooking food, boiling water, heating
and lighting the home and being able to travel so as to obtain basic
medical services are compromised. Other needs, such as participation
in society and control of institutions, are often impossible to
meet, and this limits potential for personal and collective development.
In most countries biomass is the main fuel source used to
meet these needs, but it is often not the most suitable, and is
certainly not always the cheapest: it is usually just the only option.
Energy poverty has major impacts on health, economic activity
and the environment, because it reduces current and future
productivity and limits potential for development. One of the
biggest (and perhaps least-known) repercussions of energy poverty
is its enormous impact on health as a result of the burning of
wood and waste. Studies show that indoor air pollution (and
especially high concentrations of fine particles) increases the risk
of contracting many diseases, especially among women, children
and the elderly, who spend more time in the home. According to
WHO figures issued in 2010, indoor pollution causes an estimated
1.3 million deaths per annum for low income countries, and is the
sixth highest risk factor for early death. It is ranked behind factors
such as infant malnutrition and lack of drinking water and
sanitation, but ahead of better known causes of death such as
tuberculosis and malaria.
Energy consumption is necessary but not a sufficient condition
for development. In this sense, there is a danger that energy
poverty may be seen merely as a manifestation of poverty in
which low income prevents people from consuming energy or
investing in infrastructures. This may lead to the idea that efforts
should be focused solely on growth and development, and that
reducing absolute poverty will do away with energy poverty.
However, energy poverty hampers many forms of development
and helps to create a vicious circle or poverty trap.
Providing universal access to modern energy sources would
require significant investment ($35 billion per year for 20 years),
but that figure does not seem so high if it is compared with other
macro-economic variables. The investment per annum required is,
for instance, considerably lower than the amount granted each
year in subsidies on fossil fuels ($544 billion in 2012), mainly in
oil-rich countries, which do not generally reach the pockets of the
poorest segments of the population.
An issue worth exploring, though it lies outside the scope of
this paper, is how poorer countries can benefit from the implementation
of new, distributed technologies based on renewable or
low-carbon energy sources (see [10,5,8]). Renewables have
become considerably cheaper in recent years, and although the
initial investment required is high the “fuel” is at least free and can
be adapted well to certain needs in rural areas. Distributed (rather
than centralised) generation could also enable major savings to be
made in resources earmarked for infrastructures, emulating the
rapid deployment of mobile telephone systems in many poor
countries, where it is thus not necessary to invest the enormous
sums associated with landlines. Another area where further
research is called for is how to make the eradication of energy
poverty compatible with emission reduction to mitigate climate
change (see [35,7,30]).
One of the main conclusions of the study is that specific policies
and programmes are required to deal with energy poverty, particularly
programmes designed to prevent its worst effects on health.
Although resources earmarked for such investments have always
competed and will always have to compete with urgent needs and
other uses, access to energy should be an important component in the
design of all-round development programmes. Although energy and
energy poverty are not mentioned in the Millennium Development
Goals for 2015, the final document produced at the Río þ20
Conference in 2012 [33] recognised “the critical role that energy plays
in the development process, as access to sustainable modern energy
services contributes to poverty eradication, saves lives, improves
Fig. 7. Fossil fuel subsidies compared to the investments needed for universal
access to energy (Billions $).
Source: [16].
M. González-Eguino / Renewable and Sustainable Energy Reviews 47 (2015) 377–385384
health and helps to provide for basic human needs”. Moreover,
although there is still a long way to go, the new proposal for
Sustainable Development Goals for 2030 (see [34]), to supersede
the Millennium Development Goals for 2015, includes as a specific
goal to “Ensure access to affordable, reliable, sustainable and modern
energy for all”, with interim goals (or “means”) by 2030 of ensuring
universal access to modern energy services, “substantially” increasing
the share of renewable energy in the global energy mix and doubling
the global rate of improvement in energy efficiency.
Acknowledgements
The author would like to thank, Alfonso Dubois, Iñaki Arto,
Iñigo Capellán-Perez. Marta Escapa, Mirene Beriain and Pedro
Linares for their comments and the Spanish Ministry of Science
and Innovation (ECO2011-25064), the Basque Government (GIC07/
56-IT-383-07) and Fundación REPSOL (via the Low Carbon Programme)
for funding. Sole responsibility for the content of this
paper lies with the author.
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