Poverty and electricity access

Definitions of poverty

Fundamentally, poverty is a denial of choices and opportunities, a violation of human dignity. It means lack of basic capacity to participate effectively in society.

It means not having enough to feed and clothe a family, not having a school or clinic to go to, not having the land on which to grow one’s food or a job to earn one’s living, not having access to credit.

It means insecurity, powerlessness and exclusion of

individuals, households and communities. It means susceptibility to violence, and it often implies living in marginal or fragile environments, without access to clean water or sanitation.

—United Nations^[4]

Poverty is pronounced deprivation in well-being, and comprises many dimensions. It includes low incomes and the inability to acquire the basic goods and services necessary for survival with dignity.

Poverty also encompasses low levels of health and education, poor access to clean water and sanitation, inadequate physical security, lack of voice, and insufficient capacity and opportunity to better one’s life.

—World Bank^[5]

Absolute poverty

Poverty is usually measured as either absolute or relative poverty (the latter being actually an index of income inequality). Absolute poverty refers to a set standard which is consistent over time and between countries.

Percentage population living on less than $2 per day 2009

The World Bank defines extreme poverty as living on less than US $1.25 (PPP) per day, and moderate poverty as less than $2 or $5 a day (but note that a person or family with access to subsistence resources, e.g. subsistence farmers, may have a low cash income without a correspondingly low standard of living – they are not living “on” their cash income but using it as a top up).

It estimates that “in 2001, 1.1 billion people had consumption levels below $1 a day and 2.7 billion lived on less than $2 a day.”^[6]

Access and usage of electricity

About 1.6 billion people (one quarter of the global population) presently have no access to electricity. Although that number has declined in absolute value (mainly due to growing infrastructure in China) and also as a fraction of the world’s population since 1970, by 2030 it is expected that 1.4 billion people will still lack electricity (IEA, 2002).

Even the very poor who have access to electricity tend to use other (less costly) energy forms for the bulk of their energy needs; electricity, which is costly, is reserved only for those applications for which electrons have no substitutes.

Tanzanian house off the grid

During our project in Tanzania we found that even people who do have access use our lights (and want more of them) as the costs of electricity are very high.

Indicators of rudimentary energy services—such as lack of access to electricity and reliance upon traditional fuels— correlate closely with most measures of poverty. At present, most of the people without electricity live in rural areas in developing countries where the challenges of economic development remain particularly severe (notably in South Asia and sub-Saharan Africa).

Despite African government policies that kept electricity prices low, some 550 million people, or almost 75 per cent of the population of sub-Saharan Africa, still do not have access. In 2004 in East Africa, fewer than 3 per cent of rural people and 32 per cent of urban residents were connected to their national grids.

Despite decades in which African governments heavily subsidized power rates and promoted rural electrification campaigns, some 550 million people, or almost 75 per cent of the population of sub-Saharan Africa, still do not have access to electricity.

In 2004 in East Africa, less than 3 per cent of rural people and 32 per cent of urban residents were connected to their national grids. According to the World Bank, only Côte d’Ivoire and Zimbabwe exceed 70 per cent coverage.

If connection rates are so dismal, what happened to all the pro-poor and rural electrification campaigns? The answer, says Mr. Ram Babu, a power specialist at the African Development Bank, is that governments’ efforts to expand access have relied mostly on capping the amount of money the power utilities can charge. But that “doesn’t help the people who need the power most,” he points out.

Rural people and other poor consumers whose homes are not yet linked to the power grid face very high connection costs. In cities where grids exist, the cost of connection may start at $200. Where there are none, construction and connection costs can exceed $1,500. As a result, “poor people in rural areas are simply not connected to the grid,”.

Some quotes:

“More than two billion people or one third of humanity have no access to electricity and are therefore without access to proper lighting. These people rely on fuel-based lighting such as kerosene, animal dung, wood or other carbon-based fuel, as well as other inefficient energy resources such as disposable batteries, candles and imported fossil fuels for running small generators.”

“The world bank estimates that 780 million women and children breathing particular laden kerosene fumes inhale the equivalent of smoke from two packets of cigarettes a day. Two thirds of adult female lung-cancer victims in developing nations are non-smokers.”

“The kerosene that’s used for lighting alone is an estimated US$48 billion per year industry. Yet fuel based light production is extremely inefficient, dangerous and expensive, and has extensive economic, health and environmental costs, both locally and globally.”

“Kerosene is more expensive than electric lighting, at 325 times higher ($/lumen hour of light) than the “inefficient” incandescent bulb, and 1,625 times higher than compact fluorescent lighting. The burning of kerosene causes both indoor and local air pollution, with fuel based lighting responsible for the emission of 244 million tons of carbon dioxide into the environment each year from developing countries.”

(This section contains information from www.un.org, WikiPedia, Lighting magazine & Kuwasha.org)