Sustainable energy development improves livelihoods, alleviates poverty and brings opportunities for development. As the perspective on poverty is becoming multidimensional, energy poverty is described as lack of access to resources, denial of opportunities and lack of choice in access to energy that is adequate, safe and reliable for economic and human development (UNDP, 2012). People who live in energy poverty are deprived of development opportunities because they lack access to reliable, affordable and modern energy services, which in turn makes it difficult for the poor to pull themselves out of poverty and so the cycle perpetuates.
Without access to the services that modern energy enables, poor people remain trapped in low-productivity subsistence tasks. This inability to improve livelihoods and living standards results in poor people remaining unable to afford improved energy technologies and other critical assets and inputs that could enhance their incomes and welfare. Data from 21 countries show that lack of access to modern energy is most acute for the poorest households. As seen in Figure 2.2, for all countries, households in the median wealth quintile have far better access to electricity than those in the poorest quintile (Pachauri et al., 2013).
The poor are less likely to have access to electricity and non-solid fuel; they are generally geographically dispersed, far from urban areas, and cannot easily be connected to existing electricity grids or distribution networks for modern fuels like liquefied petroleum gas (LPG).
The access issue is compounded by the fact that rural populations, whose livelihoods are typically based on agriculture, have limited disposable income to finance the initial costs of grid connection, wiring and the monthly payment of energy bills. The result is that resource-constrained utilities find the costs of extending grids prohibitive and consider such investments unattractive and risky. The poor end up paying more for the same unit of energy than other income groups. On average, 20-30 per cent of annual income in poor households is spent on energy services and fuels. In addition, these households spend
Figure 2.2
Household access to electricity for the median and poorest wealth quintiles
rwanda Burkina faso madagascar malawi mali Kenya guinea ethiopia mozambique Cameroon Cambodia senegal Bangladesh Cote d’lvoire ghana Peru morocco india Bolivia nepal Philippines Pakistan indonesia viet nam Colombia egypt
0 20% 40% 60% 80% 100%
Median Poorest
Source: Pachauri S., Scott A., and others (2013), Policy Guide 3. Energy Policy Guide: Energy for All:
Harnessing the Power of Energy. www.chronicpovertynetwork.org
up to another 20-40 per cent on indirect expenses associated with collecting and using that energy, such as health-care costs related to indoor air pollution and injuries linked to biomass fuel use or costs related to loss of time. Data even show that, in extreme cases, some of the poorest households spend 80 per cent of their income directly obtaining cooking fuels (Sovacool, 2013). This segment of the population also provides a market opportunity for energy service providers.
To break the energy-poverty nexus, ensuring universal access to affordable, reliable, sustainable and modern energy for all will be a prerequisite. Enabling productive use of energy that brings income-generating opportunities will facilitate poverty alleviation and help to achieve sustainable development.
Conclusions
In the Asia and the Pacific region, fossil fuels (oil, natural gas and coal) are dominating energy sources. Total amount of oil supply in Asia and the Pacific grew from 1,019 Mtoe in 1990 to 1,604.7 Mtoe in 2014, while the share of oil in TPES for the region decreased from 30.4 per cent to 23.7 per cent (Asia Pacific Energy Portal, 2016). The supply of natural gas in the region grew from 601 Mtoe in 1990 to 1,227.6 Mtoe in 2014 while the share of natural gas in TPES almost stabilized (Asia Pacific Energy Portal, 2016). Coal as a primary source for energy supply almost tripled; from 1,067 Mtoe in 1990 to 2,939.5 Mtoe in 2014, resulted in the share of coal in TPES for the Asian Pacific grew from 31.9 to 43.4 per cent (Asia Pacific Energy Portal, 2016).
Lower prices will have significant implications for many countries. Low international oil prices provide policy makers a unique opportunity to implement reforms on energy taxes and fuel subsidies, which may raise revenues and reorient public spending toward infrastructure and other productive uses. Demand for natural gas is expected to grow in Asia and the Pacific. Reform of the pricing structure of natural gas is becoming a critical concern for countries in the region as they are paying higher prices compare to other markets. Coal has been a supporting fuel for the region. Coal is likely to continue its critical role in providing affordable and reliable electricity to countries in the region, one issue that need to be focused on is the resulted air pollution and GHGs emissions.
One good fact is that despite low international oil prices, renewable energy remains strong growth in terms of both investment and installed capacity, driven by a combined force of declining cost of renewable energy technology, concerns over environmental sustainability, climate change and energy security, and the importance to use indigenous energy resources.
The 2030 Agenda for Sustainable Development and the Paris Agreement on Climate Change will shape the future energy profile. It is recognized that energy is fundamental for sustainable development, and the social, environmental and economic aspects of energy need to be incorporated when addressing energy issues. Alleviating environmental pollutions, climate change, breaking the energy-poverty nexus, and facilitating regional cooperation on energy connectivity are all important for enhancing regional energy security and sustainable use of energy.