Rethinking power in developing nations

Rethinking power in developing nations

WASHINGTON (Axios): It’s time for the world’s biggest multilateral development agencies to radically reframe their goals around expanding electricity access, a new proposal argues.

Why it matters: The nonprofit Energy for Growth Hub says the UN’s current sustainable development goals (SDGs) around power access are too modest and focus too narrowly on residential use.

Without another metric, the SDGs fail to consider the higher consumption needed to truly lift incomes and economies, the report says.

Driving the news: Energy for Growth Hub is calling for a new metric called the “Modern Energy Minimum” of 1,000 kilowatt-hours (kWh) per person annually worldwide.

The group, which worked with the Rockefeller Foundation on the proposal, hopes to convince the UN, World Bank and International Energy Agency and others of the idea’s merits.

How it works: The report sees that 1,000 kWh split roughly 30% for home use and 70% for use in commerce, transport, industry and more.

“[E]lectricity used outside the home includes most of the ways energy contributes to economic activity and higher income,” they note.

Their analysis shows that 1,000 kWh “tightly correlates” with an average income of roughly $2,500 annually — the midpoint of estimates for what’s considered lower-middle income.

The big picture: There has been considerable progress toward the electricity part of the UN’s widely cited SDGs for 2030. Per the World Bank, the number of people without access to electricity declined from 1.2 billion in 2010 to 789 million in 2018.

But, the new report notes that the IEA, which works with the UN and World Bank on tracking the energy goal, defines access as 50 kWh-per-capita in rural areas and 100 kWh-per-capita in urban areas.

“The current metric is irrelevant for 150+ countries, where basic access is already solved but electricity is still a constraint on income growth and job creation,” Todd Moss, executive director for Energy for Growth Hub and former State Department official, tells me.

Of note: Even 1,000 kWh is still less than a tenth of average U.S. consumption.

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