Avoiding the energy deficit catastrophe: Need for a policy overhaul

On many occasions, I have faced the need to comprehensively define energy policy or climate policy for people whose interests are aroused by the news stories/articles on energy, climate change, environment etc that come up daily. In a bid to offer a simple definition (but my professors will usually pause before saying, “this is complex and complicated”) to my listener energy and climate policy is a policy that helps to sustainably meet global energy needs while keeping global temperature below 2°C – exactly at 1.5°C –as global populations continue to increase.

In reality doing what this definition says is the biggest challenge that the world faces today. This comprises of solving energy access, energy efficiency, energy resource utilization and environmental sustainability issues, making the necessary socio-technical transitions that the introduction and use of appropriate climate mitigation and climate adaptation measures will throw up. More importantly it is about having the political leadership to make the right policies, committed to obligations that help ensure that these policies translate to effective actions on the ground. These policies define and determine how the exponentially growing energy demands of the world growing population are met. In 2015, the United Nations published the World Population Prospects, which revealed that the world population will reach 8.5 billion in 2030 and 9.7 billion in 2050. Half of the global population is expected to be concentrated in nine countries namely India, Nigeria, Pakistan, Congo DR, Ethiopia, Tanzania, United States of America, Indonesia and Uganda. Seven of these countries except Pakistan are developing countries among the top ten countries in the world, and have the highest electricity access deficit according to the World Bank Regulatory Indicators for Sustainable Energy (RISE) report 2016.

The RISE report which is a global scorecard that compares the existence of strong policy and regulatory framework for sustainable energy across the world placed India, Pakistan, Uganda, Tanzania, Ethiopia, Congo DR and Nigeria ranked 75, 55, 53, 48, 30, 27 and 13 respectively on the position table. These countries except Nigeria scored higher than 33 on the overall score which means that significant opportunities exist from which to strengthen the policy framework for countries that score between 34-66 and it shows the existence of strong policy to support sustainable energy with countries that scored between 67-100. Twenty seven indicators and 80 sub indicators were used for the study across three energy categories: energy access, energy efficiency and renewable energy. For energy access, the indicators were the existence and monitoring of an officially approved electrification plan, scope of officially approved electrification plan, framework for grid electrification, framework for minigrids, framework for stand-alone systems, utility transparency and monitoring, utility creditworthiness, establishing a new household grid connection, permitting a new minigrids for energy access. For energy efficiency, the indicators were existence of national energy efficiency planning and energy efficiency entities, incentives from electricity rate structures, information provided to electricity consumers, and energy labelling systems. Other indicators included building energy codes, carbon pricing and monitoring, minimum energy performance standards, mandates & incentives: large consumers, mandates & incentives: public sector, mandates & incentives: utilities and financing mechanisms for energy efficiency. For the renewable energy category, the indicators were legal framework for renewable energy, planning for renewable energy expansion, incentives & regulatory support for renewable energy attributes of financial and regulatory incentives, network connection and access, counterparty risk, carbon pricing and monitoring.

While RISE cautions that the score only measures the difference between countries on providing an attractive policy environment and does not give any indication on the amount of investment that is likely to come under current conditions, it is safe to argue that the scores provides an investor the necessary basic information to consider making a investment in the categories under review. It should be noted also that the existence of strong energy policies and regulatory frameworks, or the existence of strong government and sector institutions, networks, associations and groups that effectively implement these policies that help create the enabling environment for investment does not guaranty the inflow of investments that would create the electricity market that is required to adequately meet the energy/electricity demands of a country. For instance, India’s position on the RISE table is 75 which is a strong score compared to the 67 bench mark for strong policy presence, on the other hand India has the highest electricity deficit in the world, still India is one of the countries making tremendous progress in improving energy access.

This is a good reminder that there are other factors that impede energy access which can never be fixed by usual energy policies and regulatory frameworks. These factors include different socio-cultural, demographic, knowledge capacity, institutional and technology factors. Of these factors, demographic factors that relate with exponential increase in energy demand due to population increase is the biggest concern at least to research community than it is for policy makers, sector practitioners and stakeholders. More often, policy makers and sector practitioners think of increase in energy demand in geometric terms than in exponential terms. This is problematic for making effective energy policies and so much more for understanding the urgency of ensuring that effective solutions are designed for solving other factors that hinder energy access.
The question that needs answers from academia, research community, policy makers, development organizations, multilateral agencies, practitioners, sector actors is – what is to be done particularly by and for India, Pakistan, Nigeria, Ethiopia, Congo DR, Tanzania, and Uganda to ensure that the policies, regulatory frameworks, investments, market development and growth programs, technology development and capacity building programs and behavioural/lifestyle change programs to improve and accelerate energy access are being designed, structured and executed as soon as possible. It is important to focus on this question as efforts are being made to achieve universal sustainable energy by 2030 and it is by 2030 that it is projected India, Pakistan, Nigeria, Ethiopia, Congo DR, Tanzania, Uganda, United States of America and Indonesia will be account for half of the world’s 8.5 billion people. The concern is that while India, Nigeria, Ethiopia, Uganda, Tanzania and Congo DR are currently among the 10 top countries with highest energy access deficit, and having likelihoods of doing (or not doing) the best they should to formulate effective energy policies and regulatory frameworks, what is clear is that these policies alone are not sufficient or effective in themselves to accelerate energy access. Consequently they can be said to be defective compared to the current and future energy demands that are and will be made on it. What is required at this stage therefore is the formulation of special policies and programmes that will ensure that the right level of institutional and sectoral capacity and readiness is built and sustained towards the energy access challenges that these countries are likely to face by 2025.

The best ways to answer some of these questions lie within the solutions and suggestions that were made in “universal energy access, a new research agenda”, published by Initiative for Policy Research and Analysis According to the publication(2016), there is a need for a shift in how energy projects and research outcomes are perceived in development circles. Projects should be viewed as a process of learning and improving process and product innovation that will benefit other projects than viewing projects just in terms of numbers i.e. target beneficiaries reached. In essence project and research objectives need to be broadened and analyzed using a multi-criteria approach. Most importantly new project and research approaches must be inclusive and open to the participation of non-experts and energy users. Also, new energy access projects and research efforts for poor rural and urban populations must seek to be more people/user centred, and open to the agency and participation of community groups, networks and local knowledge experts in the grassroots technologies, social behaviour, psychology, culture and traditions that are important enablers of technology adoption and diffusion. To ensure that achieving the universal sustainable energy is not just a wish, care must be taken by the global community to ensure that these countries – India, Nigeria, Ethiopia, Tanzania, Congo DR, Ugandastart today to do the right thing to ensure that no one is not left behind on energy access targets by 2030 and beyond.
• This piece was first published by Initiative for Policy Research and Analysis (InPRA).

 

Okafor Akachukwu