Energy Access Outlook 2017

Energy access is the “golden thread” that weaves together economic growth, human development and environmental sustainability. The adoption of the Sustainable Development Goals in 2015, and the adoption of SDG 7.1 specifically – the goal to ensure access to affordable, reliable, and modern energy for all by 2030 – established a new level of political recognition for energy’s central role in development.

Improvements in technologies are offering new opportunities for making significant progress on the SDG goal on electricity access. The combination of declining costs for solar and decentralised solutions, cheaper and more efficient lighting and appliances, and new business models making use of digital, mobile-enabled platforms has increased the number of available solutions to cater to those currently without electricity access. But many challenges remain, particularly for clean cooking.

Efforts to promote electricity access are having a positive impact in all regions, and the pace of progress has accelerated. The number of people without access to electricity fell to below 1.1 billion people for the first time in 2016, with nearly 1.2 billion people having gained access since 2000, 500 million of which were in India. Most progress has been made in developing Asia, where 870 million gained access since 2000, of which India account for 500 million gaining access – one of the largest electrification success stories in history. There is also for the first time a positive trend in sub-Saharan Africa, where electrification efforts have been outpacing population growth since 2014. However, progress is uneven, and there are still more people without electricity today than there were in 2000.

Of the 1.2 billion people who have gained access since 2000, nearly all have gained access via connection to the main grid, with 70% of people getting access with power generated from fossil fuels (45% coal, 19% natural gas and 7% oil). However, the declining costs of renewables and efficient end-user appliances, along with innovative business models financing electricity access, are all having an impact, and have been transforming the energy access landscape, especially in rural areas. Over the last five years, renewables have started to gain ground, as have off-grid and mini-grid systems, and this shift is expected to accelerate. Over the past five years, renewables (mainly hydro and geothermal) have been the source of over one-third of new connections, and decentralised renewables are the source of 6% of new electricity access.

Today, an estimated 2.8 billion do not have access to clean cooking facilities. A third of the world’s population – 2.5 billion people – rely on the traditional use of solid biomass to cook their meals. Around 120 million people use kerosene and 170 million use coal. There has been some progress: since 2000, the number of people in developing countries with access to clean cooking – principally liquefied petroleum gas (LPG), natural gas and electricity, has grown by 60%, and the number of people cooking with coal and kerosene has more than halved. However, strong population growth in developing countries, especially sub-Saharan Africa, has meant that the number of people relying on biomass for cooking has grown by 400 million people, despite growing awareness of the associated health risks and decades of programmes targeting access to modern cooking.

In developing Asia, 1.65 billion people (43% of the population) rely on biomass for cooking. This represents an increase of 160 million people since 2000. A further 225 million people cook with coal and kerosene, a decline from 600 million in 2000, due to switching to LPG, natural gas and electricity. This fuel switch reflects a growing awareness of the harmful effects of household air pollution related to cooking, increased policy efforts to boost the uptake of LPG and natural gas and rising urbanisation, which makes it easier to access clean cooking fuels.

Sub-Saharan Africa is the region showing the least progress on clean cooking. Almost 80% of the population still cooks with solid biomass, a share that has declined by just three percentage points since 2000. Population growth means that, despite this small percentage decline, the number of people still cooking with solid biomass actually has increased by 240 million to reach around 780 million. Of the 25 countries in the world where more than 90% of the population cooks with solid biomass, 20 are in sub-Saharan Africa. An additional 60 million people (mainly in Nigeria and Kenya) use kerosene.

The country-by-country analysis of policies, investment and technologies that underpins the New Policies Scenario shows a projected electrification rate of 99% in developing Asia and in Latin America and 95% in the Middle East by 2030.

India’s continued emphasis on electrifying households means it is expected to reach universal electricity access in the early-2020s, with renewables accounting for about 60% of those who gain access.

In sub-Saharan Africa, the access rate grows to 59% in 2030, from 43% in 2016, however, the number of people without electricity access in the region begins to grow again as efforts fail to accelerate. Of the 674 million people still without access to electricity in 2030, 90% live in sub-Saharan Africa.

Over the period to 2030, new connections to the grid bring electricity to over half of those that gain access, and offer the most cost-effective means of access in urban areas, but decentralised systems are the most cost-effective solutions for over 70% of those who gain access in rural areas. By 2030, renewable energy sources power over 60% of new access, and off-grid and mini-grid systems provide the means for almost half of new access, underpinned by new business models using digital and mobile technologies.

Policies bear fruit in China and Indonesia, but universal access to clean cooking remains elusive in most of sub-Saharan Africa and many parts of developing Asia.

Under the New Policies Scenario, the population without access to clean cooking facilities slowly declines from 2.8 billion people in 2015 to 2.3 billion people in 2030. Despite the seemingly slow progress, 900 million people in fact gain access to clean cooking; urban areas seeing some substantial progress, with the number of people relying on biomass declining by over 40%. In rural areas, the population relying on biomass decreases from 2 to 1.8 billion people in 2030, but nearly 60% of rural populations in developing countries still rely on biomass as their main cooking fuel.

In developing Asia, the share of biomass in the residential sector declines from around 50% today to 33% in 2030 as demand for gas and electricity for cooking increases in the New Policies Scenario. This decline is driven by a mix of economic growth; urbanisation, more availability of LPG, natural gas and electricity; and stronger policy efforts to promote modern fuels and improved cookstoves, motivated by the goals of reducing household air pollution and environmental degradation. Significant reductions in the population without access to clean fuels and stoves for cooking come from countries with dedicated policy initiatives, in particular China, India and Indonesia.

In sub-Saharan Africa,around 320 million people gain access to clean cooking facilities during the period to 2030, an estimated 100 million of them as a result of the intentions related to clean cooking pledges in countries’ Nationally Determined Contributions. However, the population of sub-Saharan Africa grows by 450 million people by 2030, and clean cooking efforts do not keep pace.

Solid biomass use in developing countries begins to decline slowly in the New Policies Scenario at about 0.6% annually between 2016 and 2030, and its share of residential energy drops from 54% in 2016 to 43% in 2030.

Affordability in particular remains a critical barrier to scaling up these solutions. Even though people without electricity access often pay a lot for their energy sources, such as kerosene and candles – sometimes more than they would pay for the same service if they had electricity access – the upfront costs for off-grid systems may still be higher than most consumers are willing or able to pay.

One of the primary business models that has emerged which provides solutions focuses on areas covered by mobile networks but not electricity grids. In the pay-as-you-go (PAYG) payment model, consumers use their phones to pay a fixed up-front cost for the device – usually a solar panel bundled with battery storage and appliances (which can include lights, radio, mobile phone chargers, and in larger systems a fan, television and refrigerator) – and then pay for its use in instalments.

The economics of this off-grid business model rely on what it provides being affordable to poor households, as well as offering an improvement on the energy services they currently have (often kerosene or candle lighting, plus payments to local businesses for charging mobile phones) at a lower cost. The affordability of these systems hinges on three main factors: the PAYG model (these companies are essentially micro-financing households), the bundling of ultra-efficient appliances (to keep the solar panel small), and the falling cost of solar panels and batteries.

Efficient appliances can play an important role in delivering electricity access. Using more efficient appliances lowers the amount of electricity needed for the same bundle of energy services. In turn, this reduces the investment cost in the supply of electricity required to deliver universal energy access, making off-grid renewable solutions more affordable to households.

Providing electricity for all by 2030 would require annual investment of $52 billion per year, more than twice the level mobilised under current and planned policies. Of the additional investment, 95% needs to be directed to sub-Saharan Africa. In our Energy for All Case, most of the additional investment in power plants goes to renewables. Detailed geospatial modelling suggests that decentralised systems, led by solar photovoltaic in off-grid systems and mini-grids, are the least-cost solution for three-quarters of the additional connections needed in sub-Saharan Africa.

Scaling up investment in electricity access will require that the right policies and investment frameworks are in place. Similarly, reaping broader social and economic benefits will require a perspective on access that extends beyond household connections to include electricity for productive uses, such as businesses, agriculture and industry. This can create anchor loads to attract investment, lowering the average cost of household connections, improving food security and creating job opportunities, notably for women.

Achieving clean cooking for all relies on the deployment of LPG, natural gas and electricity in urban areas, and a range of technologies in rural areas and the involvement of local communities, especially women, when designing solutions. To achieve clean cooking for all, an additional 2.3 billion people need to gain access to cleaner fuels and technologies by 2030.

The investment required for clean cooking facilities is modest, amounting to less than one-tenth of what is needed for universal electricity access. In the Energy for All Case, 800 million people gain access in urban areas. The mix of fuels and technologies for clean cooking in rural areas varies, depending on locally available resources and infrastructure, but in total around 1 billion people in rural areas gain access via improved biomass cookstoves, while LPG and biogas provide for the remaining 1 billion people. Providing funds is not enough on its own. Experience shows that past programmes can fall short if they don’t take account of social and cultural factors and do not involve women from the outset.

Providing energy for all would significantly improve the lives of those without access and boost their economic prospects.

Women in particular stand to gain by cutting the time spent gathering fuel and cooking and avoiding household air pollution. At present, an estimated 2.8 million people die prematurely each year because of the smoky environments caused by burning solid biomass in inefficient stoves or from combustion of kerosene or coal for cooking. Women and children suffer most of the worst effects.

In addition, households relying on biomass for cooking dedicate around 1.4 hours each day collecting firewood, and several hours cooking with inefficient stoves, a burden largely borne by women. Providing access to clean cooking for all lowers the premature death toll by 1.8 million people per year in 2030. It also reduces the amount of time spent gathering fuelwood and cooking - time which can be redirected to more productive activities or to acquire new knowledge and skills.

Achieving energy for all by 2030 will have no net increase on global greenhouse-gas emissions.

Providing energy for all would have a minimal impact on global energy demand, with an increase of 0.2% (37 million tonnes of oil equivalent) relative to our base case. However, the corresponding rise in carbon-dioxide (CO₂) emissions of around 0.2% in 2030 is more than offset as reducing the biomass used for cooking provides a net reduction in greenhouse-gas emissions, which would save the equivalent of around 165 Mt of carbon-dioxide equivalent from methane and nitrous oxide.