To close the energy poverty gap, we need ideas, investment…and natural gas. Todd Moss responds to Hannah Ryder

CGD’s Todd Moss responds to Hannah Ryder’s critique of his ‘let them burn fossil fuels’ line on energy povertyTodd-Moss_detail Thanks to Hannah for raising some good questions about my proposal that the US agency OPIC partially exempt the world’s lowest-income, lowest-emitting countries from the greenhouse gas cap. I think we both agree that 1.3 billion people without access to electricity in the 21st Century is inexcusable. It’s a development problem that can and should be solved. We also agree that the past approach to power has been insufficient, and that to close the energy poverty gap we need new ideas and new technologies. Here’s where we disagree:

  • Greater investment is necessary if we want to close the energy poverty gap. The data on additional generation capacity and access do not, as she suggests, show that increases in the former have no relation to decreases in the latter. Rather those IEA graphs in an apples-to-apples (global-to-global) comparison show the opposite: a clear decline of roughly 25% between 1985-2000 in the total number of people without access to electricity. Yes, this decline is driven by East Asia, but this is also likely to be precisely where the bulk of the investment and capacity additions have occurred (IEA doesn’t provide ungated data on capacity addition disaggregated by region – I’d love to see that). More recent estimates (in World Energy Outlook 2011) show that the number of people without electricity has continued to decline by some 300 million in the past decade. In other words, is seems safe to assume that where massive investment takes place (e.g., China), millions of people are gaining access to power. Thus, the conclusion, including in the paper Hannah cites, is that even more investment is needed (they suggest 5x current levels). If this is the case, it seems odd that we would question whether capacity should really increase or, worse, hamstring our agencies tasked to boost this investment with environmental mandates that have nearly zero effect on global emissions targets.
  • Off grid renewable may be better, but it’s not realistic everywhere. Certain populations may benefit from new technologies and new models, such as off-grid renewable sources. We should absolutely leverage our policy tools to deploy these where we can. But the scale of the problem is such that sizeable populations will still require old-school on-grid power that is (at least based on current economics) probably going to come from fossil fuels. This is especially likely for underserved urban populations and heavy industrial projects. This World Bank paper reports that barely half of poor residents in Dakar and Nairobi have access to electricity. OIL & GAS Production Reaching the rest will come, not from some high-tech solar system, but from hooking up more homes to the grid and boosting generation capacity in big power plants. Ditto for the 97% of large firms in Nigeria that rely on (costly, inefficient, and polluting) diesel generators to provide nearly 2/3 of their power. Similarly, Ghana’s Valco aluminum smelter in the industrial port of Tema is running at 20% capacity for the sole reason of a shortage of low-cost power. Getting Valco to capacity, with all the jobs and spin-off industries that would accompany full production, is going to require new power investments in large-scale power.
  • Natural gas will be part of the solution. My proposal specifically excludes coal, but not natural gas. This distinction is partly political, but it’s mainly pragmatic: many of the same countries that have substantial energy poverty gaps also have natural gas reserves that could be transformed into domestic energy.  Just in Africa in the past few years, Kenya, Tanzania, Mozambique, Ghana, and Cote d’Ivoire have had major new gas finds. And Nigeria still flares much of its gas. Why should we stand in the way of these countries turning these resources into electricity and jobs for their people? We shouldn’t—especially when we have placed no such constraints on ourselves.

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3 Responses to “To close the energy poverty gap, we need ideas, investment…and natural gas. Todd Moss responds to Hannah Ryder”
  1. It’s good to see this discussion about exactly what is required to achieve energy access for all. This is something that Practical Action is working on intensively.
    It’s worth noting that the IEA (World Energy Outlook 2011) also estimates that globally, 55% of all new electricity generated will need to be by mini-grid and isolated off-grid solutions if everyone is to enjoy access to sufficient electricity by 2030.
    So yes, there will be a role for grid extension, for example, in reaching the urban poor.
    However, funding flows have historically been hugely skewed towards grid extension. It would be good to see the balance adjusted to something like the proportions the IEA estimates are required.
    Also, electricity is only a part of the picture. For energy access to fulfil its potential as a powerful catalyst for development, we need to consider the full range of energy services that people need, want and have a right to – at a minimum level including fuels for cooking and mechanical power. This is the line we’ve been pursuing very strongly through, for example, our ‘Poor People’s Energy Outlook’. Incidentally, gas can play a role in that picture in terms of clean cooking fuels (never mind its use in electricity generation).

  2. Mal

    Instead of exempting them from greenhouse gas cap, they should be educated (and monetarily supported)by responsible developed nations in renewable energy resources. Obviously this can’t happen overnight!

  3. Andrew Scott

    I welcome active debate on energy and development policy. The more so when the debate might reach audiences unfamiliar with the issues, as may be the case amongst readers of From Poverty to Power.
    But I cannot help thinking this is a bit of a non-blogbattle. Both Moss and Ryder agree on the importance of addressing energy poverty and on the need for additional investment to achieve this. Both agree that electricity generated from fossil fuels can play a role in delivering electricity to poor families. (Neither mentions energy for cooking, which is the largest single use of energy by poor households and in most low-income countries.)
    Moss argues that limits to support for investment in fossil fuel-based electricity in developing countries is an unnecessary constraint. Ryder may not to disagree. On the other hand, the assumption Moss makes that renewables = off-grid is not universally applicable. This Ryder recognises. Nor does Moss really reflect, at least in the blog and reply, that while 5 times more investment in energy access is necessary to eradicate energy poverty, this is a very small proportion of the total investment in energy required. Since his focus is grid-based electricity for the urban poor, he does not address the question of how to ensure that expansion in generation for the grid will actually reach the poor. A power station burning fossil fuels feeds into the grid, but who receives the electricity is a distribution question. Hence Ryder’s highlighting of inequality.
    There is a real policy question here, for both donors and developing country governments. To what extent should low-income countries be investing in renewable electricity generation now, with medium to longer-term objectives in mind; or should they focus only on the immediate energy poverty challenge? If there is a disjuncture between the immediate and longer-term objectives because of costs, what kind of support should donors be providing that addresses both poverty and long-term sustainability?
    Now, I would really welcome debate about this question.