Sustainable Energy for All (SEforALL) released new research findings this week noting that national governments are uniquely positioned to target and support disadvantaged populations most in need of energy services by providing safety nets for those living in energy poverty.
The ‘Energy Safety Nets‘ report from SEforALL, produced in partnership with the Overseas Development Institute (ODI) and the Catholic Agency for Overseas Development (CAFOD), is a first-of-its-kind research series to inform best practices at the intersection of energy policy and social assistance to protect very poor, vulnerable, and marginalised populations.
The term ‘Energy Safety Nets’ refers to government-led approaches to support the very poor and vulnerable to access essential modern energy services across both electricity and clean fuels and technology for cooking – two critical elements of Sustainable Development Goal 7 (SDG7) which calls for sustainable energy for all by 2030.
“To achieve universal energy access, we must close the affordability gap and put the poor first. Public finance and governments play a key role in bridging this gap to connect poor and vulnerable populations to modern energy services they can afford,” said Damilola Ogunbiyi, CEO and Special Representative of the UN Secretary-General for Sustainable Energy for All and Co-Chair of UN-Energy.
She added: “Governments can use this research to inform and design effective Energy Safety Nets – helping to improve both people’s welfare and further progress on SDG7.”
Many countries around the world have implemented ‘Energy Safety Nets’ in different forms. They close the affordability gap between market prices and what poor consumers can pay for both connections and service delivery tariffs, ensuring that households or social groups are not left behind in progress to meet Sustainable Development Goals (SDGs).
The new report examines existing approaches in Brazil, Ghana, India, Indonesia, Kenya, and Mexico to identify lessons learned and pitfalls to avoid for the sake of informing future development of Energy Safety Nets.
Insights from each of the country case studies were compared and revealed five main takeaways for policymakers to consider when designing their own energy-focused social assistance mechanisms. They include:
- Connections and consumption: Household connections to a local mini-grid or LPG system, for example, do little good if an individual cannot afford the energy they provide over the long run. Distinct approaches are needed to support energy connections and ongoing consumption – for example monthly electricity bills and regular fuel consumption.
- Targeting mechanisms: The type of subsidy delivered and the mechanism for delivering it will impact an initiative’s effectiveness. Energy Safety Nets must be designed to target specific groups while being mindful of their energy needs, including the different needs of women and men.
- Data improves targeting: A lack of evidence on the energy consumption levels within vulnerable households prevents policymakers from determining appropriate thresholds for subsidies. Additional data collection – including disaggregated by sex – on the specific energy needs of the poor would enhance program design and allow policies to be more efficient.
- Flexibility needed: Energy Safety Nets should be appropriate to the country’s institutional, geographic, economic and social context, including efforts to promote gender equality. They must also be adaptable to changing social and economic and social conditions and to lessons learned through implementation.
- Political commitment: The success of Energy Safety Nets depends on strong, multi-year political commitment. National-level pledges to achieve universal energy access, supported by policy commitments to social assistance for the poor and disadvantaged groups, may be necessary to ensure access goes beyond energy connection targets and includes essential energy consumption levels.
Governments also have the opportunity to integrate Energy Safety Nets with their existing social assistance mechanisms or social safety nets for added efficiency. Existing programming in support of the poor can offer valuable data on who can or who cannot afford energy services, helping improve targeting of energy subsidies.
The Energy Safety Nets research series includes Energy Safety Nets: Using Social Assistance Mechanisms to Close Affordability Gaps, a Guide for Policymakers, six country Case Studies and six Policy Briefs offering concise policy analysis for each of the six countries examined.
Get involved in discussions around investing in African power and energy and more at the African Utility Week and POWERGEN Africa conference. Click here to register to attend or for more information about the event.