For the Poor, How Much Energy Is Enough?

By Greg Rehmke -- October 2, 2018

“Solar may be the way to go for millions of poor people around the world, at least for starter off-grid energy. I rely on solar power for my nifty water fountain and fun outdoor Christmas tree lights. But I don’t try to power my refrigerator, hot water heater, washing machine, or other household appliances with solar.”

For prosperity and human flourishing, how much energy is enough? American settlers survived and over time prospered burning wood for cooking and heat. Later energy innovations brought higher-density energy from the earth, with coal, oil, and natural gas providing industrial and household heat and electricity.

Across the developing world though, hundreds of millions still burn wood and dung for cooking and heat. Lack of clean energy killed some 124,000 in India in 2015, according to Lancet: Pollution Due To Burning Of Cow Dung & Wood As Fuel Killed 1.24 Lakh People In One Year  (IndiaTimes, updated June 4, 2018)

Indoor pollution, which is not often seen as potentially harmful, is actually fatal. According to a report published in Lancet, a noted medical journal, indoor air pollution caused 1.24 lakh premature deaths in India in 2015, more than the emissions from coal power plants or other industrial sources.

In Nigeria, a country with extensive hydrocarbon resources, Minister of Power, Works and Housing, Babatunde Fashola, says 90 million, half the population, still lack access to electricity. In “Developing Renewable Energy in Africa: The Interplay of Technology, Economics and Law,” the Minister’s explains:

“Africans have trillions standard cubic feet (SCFs) of natural gas reserves, billions of barrels of crude oil reserves and billions of tonnes of coal; but Africa has even greater abundance of renewal [renewable] energy resources. …”

He noted that to make electricity available to all Nigerians, efforts must be concentrated on developing renewable energy along with conventional power plants to maintain a balanced energy in the short, medium and long-term. (As 90 Million Nigerians Lack Electricity, AllAfrica, May 6, 2018)

With Nigeria having so much natural gas, oil, and coal, why was this presentation focused on “Developing Renewable Energy…”? Online estimates say some 60% of Nigeria’s people live in rural areas, and living far from electricity grids often makes solar power a reasonable alternative. The United Nations says 13 million people live in Nigeria’s largest city, Lagos (other researchers estimate as high as 21 million). (Why African cities don’t make their residents richer, The Economist, October 4, 2016). Apart from rural electricity challenges, Nigeria has city electricity challenges, as reported in Lagos’s blackout nightmare: the suburb that’s been in darkness for five years (The Guardian, February 25, 2016).

How much do current U.S. and U.N. foreign assistance programs lean on the Nigerian government and other developing countries to spend money on renewable energy and discourage additional natural gas and coal-power generation? (Nigeria is building some natural gas power plants along with its renewable energy push.)

In the U.S. it is usually wealthy families who install subsidized rooftop solar, rather than lower-income families. And lower-income families pay higher electricity bills to cover rooftop solar subsidies, grid upgrades, as well as distant wind power turbines. (See Climate-Change Policies Can Be Punishing for the Poor, discussed below).

Across societies and economies, what is the proper role of government in the provision of electricity? Politicians, pundits, and businesses a century ago debated government vs. regulated utilities vs. free enterprise electricity generation. The U.S. ended up with some government electricity, like the federal Tennessee Valley Authority, and city utilities, like Seattle City Light. Over most of the country government-regulated local monopolies provide electricity. (For history and economics of electricity generation, see Electricity and Its Regulation  and Energy (The Library of Economics and Liberty) and LearnLiberty video, Regulating Monopolies: A History of Electricity Regulation – Learn Liberty.)

Energy and Civilization

Bill Gates in numerous posts recommends the research and books of Czech-Canadian scientist Vaclav Smil. The December, 2017, GatesNotes post, How energy makes life possible explains:

In his latest book, Energy and Civilization: A History, he goes deep and broad to explain how innovations in humans’ ability to turn energy into heat, light, and motion have been a driving force behind our cultural and economic progress over the past 10,000 years. Yes, our history has a lot to do with kings and queens and games of thrones. Smil shows that it has even more to do with energy innovation.

Mr. Gates tweeted his recommendation of a Science magazine look at Smil’s work, Meet Vaclav Smil, the man who has quietly shaped how the world thinks about energy, (Science, May 21, 2018).

Here are Smil’s views on renewable energy policies from thirty years ago in: ‘Lure of the Renewables’ (Vaclav Smil in 1987 for today MasterResource, August 18, 2016):

Perhaps the most distressing characteristic displayed by the pushers of soft energy was the intellectual poverty of their grand designs, their impatient dismissal of all criticism, their arrogant insistence on the infallible orthodoxy of their normative visions.

Another post, ‘The Limits of Energy Innovation’: Timeless Insight from Vaclav Smil (MasterResource, November 22, 2013), offers an historical perspective on energy development and is skeptical at Obama Administration green energy programs:

President Barack Obama has promised an energy revolution in the world’s largest economy, with renewable sources of power and “green” technologies breaking America’s – and ultimately the world’s – dependence on conventional fuels…. But how realistic is this vision?

The federal push to subsidize green (or “sustainable”) energy has influenced foreign aid programs and priorities and been heavily promoted by the United Nations, World Bank, and NGOs. Consider this USAID climatelinks post: Enhancing Capacity for Low Emission Development Strategies (EC-LEDS):

Enhancing Capacity for Low Emission Development Strategies (EC-LEDS) is a flagship U.S. program that has forged partnerships with more than two dozen developing countries—from Colombia to Indonesia to South Africa to Ukraine— committed to and taking concrete actions to achieve low emission development.

Under EC-LEDS, USAID, the State Department, and other U.S. agencies work with partner countries to help develop tools and analyses to estimate GHG emissions and identify and pursue the best options for low emission growth. This empowers countries to evaluate low emission pathways across economic sectors so they can choose the optimum path to low emission development.

But what happens when “low emission pathways” cost more and provide less-reliable power than electricity from burning natural gas or coal?

The popular 2005 book of Earth Institute’s Jeffrey Sachs, The End of Poverty, was followed in 2015 by The Age of Sustainable Development. The goal of ending poverty seems replaced by the goal of developing sustainably. Does this mean advancing wind and solar power across the developing world is more important than providing the quickest and least expensive electricity, even if hydrocarbon powered?

To End Poverty, Increase Access to Energy, (Scientific American, September 17, 2018) is subtitled: “Concern about climate change has unintended consequences for the most impoverished countries,” and notes that among the seventeen United Nations “Sustainable Development Goals” (SDGs), “access to energy for all” was number seven.

But how much energy “for all”? Well, according the the United Nations, goals for annual energy for the poor of the world would be as much as people in developed countries use in just 33 hours:

Yet the data indicator used by the U.N. to determine energy access success is minimum threshold of 50 kilowatt-hours per year. In other words, the goal would be considered met if a person in India or Senegal used as much energy in a whole year as an average American uses in just 33 hours.

This is part of a broader problem of the “sustainable” side of today’s international foreign aid establishment. Global warming and climate change are considered higher priorities by many than providing enough electricity to power washing machines and air conditioners across the developing world.

The Scientific American Observations post notes:

Scalable energy solutions aimed at business and productive uses do not fit the standard narrative about poverty reduction. They are, by nature, vast in size and industrial in nature. Natural gas is one example of a dramatic, often overlooked solution. It’s worth taking a closer look.

Natural gas is an energy-dense fuel that can be used to generate electricity, power cars and fuel cookstoves, all with significantly lower air and carbon emissions than existing technologies like coal-fired power plants or indoor heating from wood or other solid fuels.

Bjorn Lomborg in Let There Be More Than Light (Project Syndicate, July 17, 2018), highlights benefits of electricity from the grid, almost all powered by burning hydrocarbons, plus hydro and nuclear, then explains that energy goals are both stepped up and down for the developing world:

A familiar refrain suggests that instead of dirty, coal-fired power plants, poor countries should “leapfrog” straight to cleaner energy sources like off-grid solar technology. Influential donors – including even the World Bank, which no longer funds coal energy projects – endorse this view.

Access to grid electricity makes a dramatic difference in the developing world:

There is a strong, direct connection between power and poverty: the more of the former, the less of the latter. A study in Bangladesh showed that grid electrification has significant positive effects on household income, expenditure, and education. Electrified households experienced a jump of up to 21% in income and a 1.5% reduction in poverty each year. …

Over the past 16 years, nearly every person who gained access to electricity did so through a grid connection, mostly powered by fossil fuels. And yet donors say that many of the 1.1 billion people who are still without electricity should instead try solar panels.

Access to Energy is at the Heart of Development, (World Bank, April 18, 2018) reports:

The World Bank has a long track record of helping developing countries expand access to affordable, reliable, sustainable and modern energy. It is doing so through supporting grid investments and helping to develop off-grid markets, for example, through programs such as Lighting Global. Since 2010, the Bank has provided more than $5 billion for energy access in over 35 countries through some 70 projects.

Following the Lighting Global link opens a page with picture of happy young people with this description:

WHO WE ARE

Lighting Global is the World Bank Group’s platform to support sustainable growth of the international off-grid solar market as a means of rapidly increasing energy access to the 1 billion people without grid electricity.

Solar may be the way to go for millions of poor people around the world, at least for starter off-grid energy. I rely on solar power for my nifty water fountain and fun outdoor Christmas tree lights. But I don’t try to power my refrigerator, hot water heater, washing machine, or other household appliances with solar.

Many articles highlight the benefits and potential of rural solar and mini-and micro-grid electricity. For example, Empowering the powerless—let’s end energy poverty (The Conversation, January 29, 2018) looks at opportunities to bypass bureaucracy and dictators:

Distributed-energy technologies such as micro-grids can provide an electricity-deprived citizen with power — and the ability to create income. This pathway to power delivery is a disruptive force that will forever change the relationship between electricity user and producer. It makes it possible for a citizen with little capital to bypass the heavy hand of bureaucracy and authoritarian dictators.

The question for foreign aid and assistance turns on whether “the planners” or “the searchers” will make the decisions about which investments are best for electricity consumers across the developing world. Development economist William Easterly notes that in developed countries we rely on “searchers” or entrepreneurs for most of our innovation and economic development. Government and NGO planners make more of these economic decisions in the developing world, thanks in part of foreign aid from NGOs and western governments.

Bjorn Lomborg in The Poor Need Cheap Fossil Fuels (New York Times, December 2, 2013) concludes:

What those living in energy poverty need are reliable, low-cost fossil fuels, at least until we can make a global transition to a greener energy future. This is not just about powering stoves and refrigerators to improve billions of lives but about powering agriculture and industry that will improve lives.

Lomborg also notes the burden of green energy subsidies hits low-income households in developed countries: Climate-Change Policies Can Be Punishing for the Poor (Wall Street Journal, January 4, 2018).

Lomborg, in Let There Be More Than Light (Project Syndicate, June 17, 2018) emphasizes that pushing solar on the developing world sets limits that don’t go far beyond lighting:

Off-grid energy at this level will never power a factory or a farm, so it cannot reduce poverty or create jobs. And it will not help fight the world’s biggest environmental killer: indoor air pollution, which is mostly caused by open fires fueled by wood, cardboard, and dung, and claims 3.8 million lives annually. This is not a concern in rich countries, where stoves and heaters are hooked up to the grid; but because solar is too weak to power stoves and ovens, recipients of off-grid solar panels will continue suffering.

In 2016, the Nigerian finance minister called out the West for its “hypocrisy” in attempting to block Africa from using coal to solve its power shortages. “After polluting the environment for hundreds of years,” she said, “now that Africa wants to use coal, they deny us.”