ADB.org speaks to Jiwan Acharya, Senior Climate Change Specialist (Energy) and Project Officer for ADB's Energy for All Partnership, about the continuing problem of widespread energy poverty in Asia and the Pacific, and the recent surge in action to make access to energy universally available.
Just how widespread is energy poverty in Asia and the Pacific?
It's unacceptably high - nearly 700 million people have no access to basic electricity services, and 1.6 billion people are still burning whatever is available, usually wood, animal dung or charcoal, for cooking and heating purposes.
What kind of consequences does energy poverty have?
One of the defining traits of energy poverty is when a large portion of a household's budget goes to poor quality energy services. There are health costs on top of the economic costs - the World Health Organization (WHO) has stated that up to 1.6 million deaths annually, mainly women and children, are caused by indoor smoke inhalation from household cooking fires.
What is the relation between lack of energy access and poverty?
One of the main barriers to energy access is that the poor's ability to pay for modern, clean energy is low. But they have a high willingness to pay. This realization leads to innovative, customized schemes to pay for and access energy, such as micro-financing or small daily payments instead of monthly bills.
Through its Energy for All Partnership, ADB works to identify the best energy access models to scale-up or replicate. We've seen numerous cases throughout developing Asia where social enterprises offering customized energy products for the poor are successful.
For example, Energy for All is currently supporting SELCO, an Indian social enterprise which provides customized solar lighting solutions. We support the development of a SELCO led "incubation centre" to train the next generation of rural entrepreneurs on bringing sustainable energy to the poor, and structuring these services to be affordable.
What kind of interventions is ADB supporting to increase access to energy?
"ADB is now looking at bringing power directly to communities through off-grid solutions using mature renewable energy technologies."
Historically, ADB mainly funded grid extension, but the grid is at its limits, and millions remain without power. ADB is now looking at bringing power directly to communities through off-grid solutions using mature renewable energy technologies.
ADB formed and leads the Energy for All Partnership which aims to bring modern energy to 100 million people by 2015 - in 2011 it led to investments of $1 billion. The partnership is focused on supporting the best models for sustainable energy services in lighting, cooking and electricity for economic benefit.
ADB is also developing a Project Development Facility to help energy access projects from the initial stage all the way through to maturity, through piloting and investment facilitation. We're building this off the success of our Energy for All Investor Forum, which brought overlooked projects both to the attention of ADB's departments, including the Private Sector Operations Department (PSOD), and that of members of our Partnership who could offer investment support.
What kind of global action is being taken against energy poverty?
When the UN declared 2012 as the International Year of Sustainable Energy for All, this created a great deal of interest in solving the problem. This culminated at Rio+20, where the private sector pledged more than $50 billion to the UN's Sustainable Energy for All campaign. However, by the International Energy Agency's estimates, $48 billion is the yearly financial requirement just to achieve universal access by 2030.
One national government that has truly stepped up to the challenge has been the Government of Norway through their Energy+ Initiative, which is a billion dollar initiative supporting modern energy access through clean energy in the developing world.
A lot of the new focus is on off-grid power. A partnership forum has been organized to discuss the Scaling-up Renewable Energy in Low Income Countries Program (SREP). SREP was designed to support developing countries in expanding energy access and stimulating economic growth through the scaled-up deployment of renewable energy solutions. The partnership porum tackles issues related to the barriers that hinder energy access, such as limited commercial financing for SMEs and consumers. ADB and its partners aim to bring down these barriers through Energy for All, SREP and similar initiatives.