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Why wait? Seizing the energy access dividend

Research report

Written by Andrew Scott

Research report

Universal access to modern energy services is a key prerequisite for poverty eradication and enabling human and economic development. Across the world, one in every five people live without access to electricity. Most of the 1.06 billion people lacking electricity live in rural sub-Saharan Africa and South Asia. Current projections show that 674 million people will still be without electricity in 2030, the target year for universal energy access under the Sustainable Development Goals (SDGs). Such a prolonged energy access gap would profoundly compromise achievement of wide-ranging SDGs on poverty and inequality, education, public health and climate change.

The recent rapid uptake of renewable energy systems, drop in technology prices and higher efficiency of appliances have boosted the range of viable electricity options and the speed at which electricity access can be provided, especially for remote rural areas that are typically the last to be reached with traditional electric-grid solutions. Different renewable technologies provide varying levels, or tiers, of electricity service, as well as economic, social and environmental benefits.

This research paper explores the concept of an energy access dividend that assigns economic, social and environmental value to the time it takes for households, businesses and communities to obtain the benefits associated with electricity access. Such a dividend would allow decision-makers to quantify the benefits of delivering electricity access faster through decentralised electricity solutions rather than through more conventional, centralised grid-based approaches. 

The report includes energy access dividend estimates for Bangladesh, Ethiopia and Kenya, focused on financial savings, educational benefits and climate benefits. By integrating dividend projections into electrification, development planning and budgeting decisions, government decision-makers can give closer support to decentralised energy solutions as a key electrification strategy. By providing faster, lower-cost access to electricity, governments have an opportunity to accelerate improvements in people’s lives and livelihoods, as well as national economies.

Andrew Scott