chapter 10 · pdf filechapter 10 - energy and development 329 chapter 10 energy and...

Chapter 10 - Energy and Development 329

CHAPTER 10

ENERGY AND DEVELOPMENT

HIGHLIGHTS

� Energy is a prerequisite to economic development. The prosperitythat economic development brings, in turn, stimulates demand formore and better-quality energy services. Many countries haveestablished a virtuous circle of improvements in energy infrastructureand economic growth. But in the world’s poorest countries, theprocess has barely got off the ground.

� Energy services enable basic human needs, such as food and shelter,to be met. They also contribute to social development by improvingeducation and public health. During the early stages of development,the absolute amount of energy used per capita and the share ofmodern energy services – especially electricity – are key contributorsto human development.

� For the first time, this Outlook presents an Energy DevelopmentIndex – a composite measure of energy use in developing countriesand of their progression in the use of modern energy services. Thestanding of all regions on that index will increase from now till 2030.Yet only a few Middle East and Latin American countries will havereached the stage of energy development that OECD countries hadattained three decades ago. Most of Africa and South Asia will remainfar behind.

� Almost 1.6 billion people in developing countries did not have accessto electricity in their homes in 2002, representing a little over aquarter of world population. Most of the electricity-deprived are inSouth Asia and sub-Saharan Africa.

� The United Nations’ Millennium Development Goals includehalving the proportion of the world’s people living on less than $1 aday by 2015. In our Reference Scenario, the number of peoplewithout electricity in 2015 will be only fractionally smaller than in2002. It is highly unlikely that the UN poverty-reduction target willbe achieved unless access to electricity can be provided to anotherhalf-a-billion of the people we expect will still lack it in 2015. Thiswould cost about $200 billion. Meeting the target also implies a needto extend the use of modern cooking and heating fuels to 700 millionmore people by 2015.

329-Chap10 8/10/04 10:32 Page 329

330 World Energy Outlook 2004

� Governments need to act decisively to accelerate the transition to modernfuels and to break the vicious circle of energy poverty and human under-development in the world’s poorest countries. This will entail improvingthe availability and affordability of commercial energy, particularly in ruralareas. The rich industrialised countries have clear long-term economic andsecurity interests in helping developing countries along the energy-development path.

This chapter considers the role of energy in development, focusing on developingcountries. It first evaluates the contribution that energy makes to economicdevelopment, the energy dimension of sustainability and the relationship between thetransition to modern fuels and indicators of human development. It goes on to assesstoday’s patterns of energy use in developing countries using the IEA’s newly-createdEnergy Development Index. The relationship between that index and the UNDP’sindex of human development is also analysed. It then looks at prospects fordevelopment based on the Reference Scenario and EDI projections. It also evaluatesthe implications of the targeted reduction in poverty by 2015 set by the UNMillennium Development Goals both for electricity access and reliance ontraditional biomass. The final section considers the policy implications of this analysis.

The Role of Energy in Development Energy is deeply implicated in each of the economic, social and environmentaldimensions of human development. Energy services provide an essential input toeconomic activity. They contribute to social development through education andpublic health, and help meet the basic human need for food and shelter. Modernenergy services can improve the environment, for example by reducing thepollution caused by inefficient equipment and processes and by slowingdeforestation. But rising energy use can also worsen pollution, and mis-management of energy resources can harm ecosystems. The relationshipsbetween energy use and human development are extremely complex. The environmental and social dimensions of human development haveattracted increased attention in recent years. The United Nations DevelopmentProgramme defines human development as the creation of an environment inwhich people can realise their full potential and lead productive, creative livesin line with their needs and interests (UNDP, 2004). In this view, economicgrowth is only one means – albeit a vitally important one – of extending therange of human choices. UNDP has developed a set of numerical indicesdesigned to measure the stage of human development in individual countriesand to facilitate cross-country comparisons (Box 10.1).

329-Chap10 8/10/04 10:32 Page 330


10

The sustainability of development can be assessed in economic, environmentaland social terms. Energy sustainability requires meeting our energy needs uponwhich economic development depends, while protecting the environmentand improving social conditions. No matter how we define “sustainable”development, most current systems of energy supply and use are clearly notsustainable in economic, environmental or social terms. In practice, sustainabledevelopment is about finding acceptable trade-offs between economic,environmental and social goals.

Energy and Economic GrowthEnergy alone is not sufficient for creating the conditions for economicgrowth, but it is certainly necessary. It is impossible to operate a factory, run a shop, grow crops or deliver goods to consumers without using someform of energy. Most studies of the relationship between energy use andeconomic development have focused on how the latter affects the former.Economic growth almost always leads to increased energy use, at least in the early stages of economic development. Empirical analysis, however,demonstrates the importance of energy in driving economic development(Box 10.2).

The United Nations Development Programme has devised five indicesof human development, including a summary Human DevelopmentIndex (HDI), which is applied to all countries, and a Human PovertyIndex (HPI-1), specially tailored for developing countries. The indicesare updated annually and the results published in the yearly HumanDevelopment Report. The HDI measures life expectancy at birth; adultliteracy and school enrolment; and per capita GDP (adjusted forpurchasing power parity). The HPI-1 measures much the same aspects,but uses different indicators: probability at birth of not surviving toage 40; adult literacy; the percentage of the population without accessto clean water; and the percentage of children who are underweight fortheir age. None of the UN indices explicitly takes energy use intoaccount. Norway, Sweden and Australia headed the HDI rankings for 2002 (UNDP,2004). The 20 lowest-ranked countries, and 31 of the bottom 35, wereall in sub-Saharan Africa. Sierra Leone came last. Among developingcountries covered by HPI-1, Barbados, Uruguay and Chile are ranked themost advanced. Again, the sub-Saharan African countries are clustered atthe bottom.

Box 10.1: UNDP Human Development and Poverty Indices

329-Chap10 8/10/04 10:32 31


The neoclassical production function attributes economic growth toincreases in the size of the labour force and to the amount of capitalavailable, as well as to increases in “total factor productivity” – a catch-allfor any part of growth that is not explained by labour and capital. Byexplicitly incorporating an energy variable in the production function1,we have estimated the contribution energy made to the growth of grossdomestic product in several countries that grew very rapidly in the 1980sand 1990s. The United States was included in the sample for comparison.The results are summarised in Table 10.1. In every country studied, except China, the combination of capital,labour and energy contributed more to economic growth than didproductivity increases.2 Energy contributed significantly to economicgrowth in all countries and was the leading driver of growth in Brazil,Turkey and Korea. Its contribution was smaller in India, China and theUnited States. Our results suggest that energy plays a bigger role incountries at an intermediate stage of economic development, becauseindustrial production often makes a large contribution to economicgrowth at this stage. The energy intensity of manufacturing, expressed asthe amount of energy used to produce a unit of GDP, is generally muchhigher than that of other economic activities. As the economy matures,more energy-efficient technology, whose contribution is captured as a partof total factor productivity, kicks in and the amount of energy needed toproduce a unit of GDP diminishes. The United States is the clearestexample. Recent studies using growth-accounting approaches yieldsimilar results.3

The results also reflect government policies and the resource endowmentof individual countries. Brazil and Mexico, where energy played theleading role in economic growth, have both industrialised rapidly. InIndonesia, the relatively low importance of energy probably reflects thecountry’s policy of importing sophisticated manufacturing technology via

Box 10.2: Assessing the Contribution of Energy to Economic Growth

1. We used the standard Cobb-Douglas formulation: Yt = At × (Kt)α(Lt)

1-β(Et)1-α-β, where Y is output,

K is the stock of capital, L is the labour force, E is primary energy use, A is the economy’s total factorproductivity and t is the time period. See, for example, Collins and Bosworth (1996).2. There are doubts about the accuracy of China’s official GDP data. Many studies have concludedthat official statistics understate GDP and overstate growth rates. This could explain China’s veryhigh productivity growth relative to other countries.3. Ayres and Warr (2003) demonstrate that including energy services measured by useful physicalwork as a factor of production in the standard production function improves the explanation ofthe historical growth path of the US economy since 1900. Productivity is only significant as acontributory factor to growth after the 1970s.

329-Chap10 8/10/04 10:32 Page 332


10

The complementary relationship between energy use and economic growth isintuitively obvious. Less obvious is the extent to which constraints on theavailability of energy and its affordability can affect economic development.Numerous studies have demonstrated that energy, capital and labour can, inprinciple, be substituted for one another to some degree. An increase in energy-input costs can be compensated by investing more in energy-efficienttechnology, shifting to less energy-intensive production or using more labour,where it is in surplus supply. In practice, structural economic rigidities andinappropriate government policies can impede the ability of the economy toadjust to changes in energy prices. In many poor countries, under-investmentin public utilities, inefficient management, under-pricing and a generallyunattractive climate for private investment cause energy shortages and holdback economic growth and development.

foreign direct investment. Korea has depended heavily on the chemicalindustry as a major engine of growth. Low levels of per capita energy usein India suggest that a lack of available energy may have held backeconomic growth and development there (per capita GDP growth inIndia was lower than in most other regions). It follows that developmentpolicies need to take into consideration energy-infrastructure needs,especially in the poorest and least industrialised regions.

Average Contribution of factors of productionannual and productivity to GDP growthGDP (% of GDP growth)growth

Energy Labour CapitalTotal factor

(%) productivity

Brazil 2.4 77 20 11 -8China 9.6 13 7 26 54India 5.6 15 22 19 43Indonesia 5.1 19 34 12 35Korea 7.2 50 11 16 23Mexico 2.2 30 60 6 4Turkey 3.7 71 17 15 -3United States 3.2 11 24 18 47

Table 10.1: Contribution of Factors of Production and Productivityto GDP Growth in Selected Countries, 1980-2001

Sources: IEA analysis based on IEA databases and World Bank (2004).

329-Chap10 8/10/04 10:32 Page 333


Energy and Human Development To understand better the relationship between energy use and humandevelopment, it is helpful to analyse the different aspects of energy use.We have identified three key indicators of energy use in developingcountries: per capita consumption, the share of modern energy services intotal energy use and the share of the population with access to electricity intheir homes.

Per Capita Energy ConsumptionThe absolute amount of energy used by each individual has historically beena key factor in human development during the early stages of the process.There is a very strong link between per capita energy consumption(commercial and non-commercial) and the UN Human Development Indexfor all countries (Figure 10.1). The link is particularly strong for non-OECDcountries with a HDI value of less than 0.8. Very few countries with percapita energy use of less than 2 tonnes of oil equivalent have a HDI score ofmore than 0.7. Once a country has reached a reasonably high HDI level,variations in its per capita energy use are largely attributable to structural,geographic and climatic factors. For the poorer developing countries,however, the picture is clear: a higher HDI goes hand in hand with increasedper capita energy use.

0.00.10.20.30.40.50.60.70.80.91.0

0 2 4 6 8 10 12 14

Primary energy demand per capita (toe/cap)

HD

I

OECDNon-OECD

Figure 10.1: HDI and Primary Energy Demand per Capita, 2002

Sources: IEA analysis; UNDP (2004).

329-Chap10 8/10/04 10:32 Page 334


10

The link between per capita energy use and human development is muchstronger when considering commercial energy alone. Per capita commercialenergy demand is ten times greater in the richest developing countries, such asUruguay and Israel, where less than 5% of the population is classified as poor,than in the poorest countries, such as Nigeria and India, where more than 75%of the population lives on less than $2 a day (Figure 10.2).

0

1

2

3

>75 40-75 5-40 <5

percentage of population living with less than $2 a day

aver

age

prim

ary

ener

gy d

eman

dpe

r cap

ita (t

oe)

Commercial energy Traditional biomass

Figure 10.2: Average Primary Energy Demand per Capitaand Population Living on Less than $2 a Day, 2002

Sources: IEA analysis; World Bank (2004).

The Transition to Modern Energy ServicesAccess to modern energy services is an indispensable element of sustainablehuman development. It contributes not only to economic growth andhousehold incomes, but also to the improved quality of life that comes withbetter education and health services. Without adequate access to modern,commercial energy, poor countries can be trapped in a vicious circle ofpoverty, social instability and underdevelopment. Increased use of modernenergy by households is a key element in the broader process of humandevelopment, typically involving industrialisation, urbanisation andincreased personal mobility. The facts bear this out: the share of modernenergy in overall energy use is strongly correlated with indicators of humandevelopment (Table 10.2).

329-Chap10 8/10/04 10:32 Page 335


As we stressed in WEO-2002, the extensive, and inefficient, use of traditionalbiomass and waste for energy purposes is both a characteristic of poverty anda cause of its persistence. Traditional fuels include charcoal, wood, straw,agricultural residues and dung. Most of such fuels are not traded commercially.Poor people in rural areas, especially women and children, spend much of theirtime gathering firewood. This practice generally leads to scarcity and ecologicaldamage in areas of high population density and strong demand for fuelwood.The use of biomass energy can reduce agricultural productivity, becauseagricultural residues and dung burned in stoves might otherwise be used asfertilizer. Inefficiently burned, biomass can be a major cause of indoor smokepollution. The World Health Organization estimates that, each year, 1.6 millionwomen and children in developing countries are killed by the fumes fromindoor biomass stoves. Over half are in China and India.As incomes rise, households in developing countries typically switch to modernenergy services for cooking, heating, lighting and electric appliances (Table 10.3).How quickly this occurs depends on the affordability of modern energy services,as well as their availability, and on cultural preferences. The process is in mostcases a gradual one. People generally shift first from traditional fuels tointermediate modern fuels, such as coal and kerosene, and finally to advancedfuels, such as liquefied petroleum gas, natural gas and electricity (Figure 10.3). 4

Commercial energyas share of total energy

consumption

Indicator 0-20% 21-40% 41-100%

Average life expectancy at birth (years) 59.8 69.0 69.5Probability at birth of not surviving to 40 (%) 21.7 9.4 9.1Gross school enrolment ratio 52.4 65.4 76.9Children underweight (% of population) 40.9 15.1 11.9Population without access to improved water (%) 20.9 22.9 12.8

Number of countries in sample 30 7 27Per cent of total sample population 42% 39% 17%

Table 10.2: Commercial Energy Use and Human Development Indicators, 2002

Note: Indicators are averages weighted by population based on 64 developing countries for which data areavailable. See the note to Figure 10.5 for the definition of “improved water access”. Sources: IEA analysis; UNDP (2004).

4. The use of traditional fuels in sustainable and efficient ways may be considered a modern energyservice.

329-Chap10 8/10/04 10:32 Page 336


10

But the transition is rarely straight-line. Some households may leap-frog directlyto the most advanced fuels if they are available and affordable.5 Rising incomesalso boost demand for personal mobility and, therefore, for transport fuels.

Urban areas Rural areasSector/ Low High Low Highend-use income income income income

Households

Cooking Wood, LPG, Wood, Kerosene,charcoal, kerosene, residues, biogas, LPG,

coal coal dung charcoal

Lighting Candles, Electricity, Candles Kerosene,kerosene LPG (or none) LPG,(or none) electricity

Space Wood, residues, Wood, coal, Wood, Wood,heating coal kerosene, residues, dung coal

LPG (or none)

Appliances Batteries Electricity None Electricity(or none) (or batteries)

AgriculturePloughing – – Manual, Diesel,

animal animal

Irrigation – – Manual, Diesel, animal electricity

Food Manual, Diesel,processing – – animal electricity

IndustryMechanical Manual, Diesel, Manual, Diesel,

diesel electricity animal electricity

Process heat Wood, Coal, Wood, Coal, charcoal charcoal, residues, charcoal,

kerosene charcoal kerosene

Table 10.3: Dominant Fuels in Developing Countries by End-Uses

Source: World Bank/WLPGA (2002).

5. See IEA (2002) for a detailed discussion of the transition to modern fuels.

329-Chap10 8/10/04 10:32 Page 337


Kerosene is generally the cheapest fuel for cooking, heating and pumpingwater, and is the easiest to obtain in developing countries. But it is hazardousas a household fuel. Kerosene stoves are a major cause of fires and source ofindoor pollution. Liquefied petroleum gas is a cleaner, safer fuel, but it is poorlydistributed in some regions. The cost of using LPG can also be a problem forvery poor households, because of the initial cost of the gas cylinder (either thedeposit or outright purchase) and the stove, which is usually more expensivethan a conventional kerosene stove.

Access to ElectricityAccess to electricity is particularly crucial to human development. Figure 10.4 plotsper capita electricity consumption against HDI ratings for the largest OECD andnon-OECD countries. The correlation is strong and non-linear. The increase inHDI scores is most rapid relative to electricity use at low levels of consumption. Putanother way, modest increases in per capita electricity use are associated with muchlarger improvements in human development. This is because electricity use in poorcountries is largely a matter of access. Electricity is, in practice, indispensable forcertain activities, such as lighting, refrigeration and the running of householdappliances, and cannot easily be replaced by other forms of energy. As we saw with per capita energy use, HDI reaches a plateau when per capita electricityconsumption attains a certain level – about 5 000 kWh per year.

Biomass7%

Gas12%

Coal12%

Electricity19%

LPG andkerosene

5%

Other oil45%

Biomass60%

75% and over of the population livingwith less than $2 a day

5% and under of the population livingwith less than $2 a day

Gas4%

Coal7%

Electricity7%

LPG andkerosene

4%

Other oil18%

Figure 10.3: Final Energy Consumption per Capita by Fuel and Proportionof People in Poverty in Developing Countries, 2002


329-Chap10 8/10/04 10:32 Page 338


10

Individuals’ access to electricity gives a better indication of a country’s electricitypoverty status than do statistics on their average consumption. Per capitaconsumption data can give a distorted impression where a very small minorityconsumes enormous amounts of electricity, while the majority consumespractically none. Taking the average of the two population segments gives amisleading impression of the prevalence of electricity poverty.We have updated the database on electrification rates that we built for theWEO-2002. We estimate that just over 1.6 billion people6 in developingcountries did not have access to electricity in their homes in 2002, a little overa quarter of the world population. Around two-thirds of the electricity-deprived are in Asia; most the rest are in sub-Saharan Africa. Four out of fivepeople without electricity live in rural areas (Table 10.4). Electrification rateshave improved steadily over recent decades, but population increases haveoffset part of this improvement. As a result, the total number of peoplewithout electricity has fallen by fewer than 500 million since 1990. Rapidelectrification programmes in China account for most of the progress.Excluding China, the number of people without electricity increased steadily over the past three decades. Detailed country-by-country statistics onelectricity access in 2002 can be found in the appendix to this chapter.

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.0

0 5 000 10 000 15 000 20 000

kWh per capita

HD

I

Canada

Qatar

SwedenFinland

United States

UAE

MozambiqueZambia

ZimbabweBangladesh

Ethiopia

South Africa

Malaysia

Argentina

Italy

IndiaMorocco

China

Brazil

Indonesia

Figure 10.4: HDI and Electricity Consumption per Capita, 2002


6. The figure is slightly lower than that given in WEO-2002 for 2000, mainly because of newconnections.

329-Chap10 8/10/04 10:32 Page 339


Energy Poverty and Human Development IndicesThere is an implicit level of energy development that underlies each level ofhuman development. Yet energy development is never identified per se by thepoverty indices, which focus more on such basic human needs as water, healthand education. Energy is a factor in procuring each of these needs, but it is notfully captured by measuring them. The example of access to clean water, afundamental need, clearly illustrates this point. Among countries which haveachieved high levels of access to clean water supplies, defined here as over 70% of the population, access to electricity varies enormously (Figure 10.5).North African, Middle East and Latin American countries have high rates of electricity access, while sub-Saharan African and South Asian countriesgenerally have much lower rates – extremely low in some cases. Such “energypoverty” is not adequately indicated by non-energy indicators. This hasimportant implications for policy-making. Since energy underlies all economicactivity, human development may be severely impeded by a lack of energyinfrastructure. An index of energy development would, therefore, introduce animportant element in understanding the drivers of human development andidentifying the policies that can achieve it.

Region Rural Urban Total

Africa 416 118 535Sub-Saharan Africa 408 117 526North Africa 8 1 9

Developing Asia 871 148 1 019East Asia and China 192 29 221South Asia 679 119 798

Middle East 13 7 14Latin America 39 1 46Developing countries 1 339 275 1 615OECD and transition economies 7 <1 7

World 1 347 275 1 623

Table 10.4: Number of People without Electricity, 2002 (million)

329-Chap10 8/10/04 10:32 Page 340


10

Ang

ola

Bang

lade

shBo

tswan

a

Nep

al

Beni

nZa

mbi

a

Burk

ina

Faso

Cam

bodi

a

Cam

eroo

n

Con

go

Cot

e d'

Ivoi

re

Con

go, D

REr

itrea

Ethi

opia

Hai

ti

Hon

dura

s

Paki

stan

Indi

a

Gab

on

Leso

tho M

adag

asca

r

Mon

golia

Mya

nmar

Nig

eria

Suda

n

Syria

Para

guay

Tanz

ania

Togo

Uga

nda

Boliv

ia

Braz

il

Chi

le Chi

na

Col

ombi

a

Cub

a

Ecua

dor

Egyp

t

El S

alva

dor

Gua

tem

ala

Iran

Alg

eria

Jam

aica

Jord

an

Keny

a

Leba

non

Libya

Mal

awi

Moz

ambi

que

Nic

arag

ua

Gha

na Yem

enIndo

nesi

a

Pana

ma

Peru

Mor

occoPh

ilipp

ines

Saud

i Ara

bia

Sene

gal N

amib

ia

Sing

apor

e

Sout

h A

frica

Sri L

anka

Thai

land

Tuni

sia

Uru

gua y

Vene

zuel

a

Viet

nam

Zim

babw

e

2030405060708090100

010

2030

4050

6070

8090

100

perc

enta

ge o

f pop

ulat

ion

with

acc

ess

to e

lect

ricity

Sub-

Saha

ran

Afri

caN

orth

Afri

caSo

uth

Asi

aM

iddl

e Ea

stEa

st A

sia/

Chi

naLa

tin A

mer

ica

percentage of population with sustainable water access

Figu

re 1

0.5:

Elec

tric

ity a

nd Im

prov

ed W

ater

Acc

ess*

, 200

2

* “Im

prov

ed w

ater

acce

ss” is

def

ined

by

the U

N as

the s

hare

of t

he p

opul

atio

n w

ith re

ason

able

acce

ss to

any

of th

e fol

low

ing

type

s of w

ater

supp

ly fo

r drin

king

: hou

seho

ld co

nnec

tions

,pu

blic

stan

dpip

es, b

oreh

oles

, pro

tect

ed d

ug w

ells,

pro

tect

ed sp

rings

and

rain

wat

er co

llect

ion.

“R

easo

nabl

e acc

ess”

is d

efin

ed as

the a

vaila

bilit

y of

at l

east

20

litre

s per

per

son

per d

ayfro

m a

sour

ce w

ithin

one

kilo

met

re o

f the

use

r’s d

wel

ling.

329-Chap10 8/10/04 10:32 Page 341


The IEA Energy Development IndexTo better understand the role that energy plays in human development, theIEA has devised for this Outlook an Energy Development Index (EDI). It isintended to be used as a simple composite measure of a country’s or region’sprogress in its transition to modern fuels and of the degree of maturity of itsenergy end-use. The index seeks to capture the quality of energy services as wellas their quantity. It is calculated in such a way as to mirror the UNDP’s HDI(Box 10.3). WEO projections for the developing regions can be used to projectfuture trends in EDI values. The index can, therefore, be used to assess the needfor policies to promote the use of modern fuels and to stimulate investment inenergy infrastructure in each region.

The EDI is composed of three dimensions: 1. Per capita commercial energy consumption.2. Share of commercial energy in total final energy use.3. Share of population with access to electricity.A separate index is created for each dimension, using the actual maximumand minimum values (known as “goalposts”) for the developing countriescovered. Performance in each dimension is expressed as a value between 0and 1, calculated using the following formula:

Dimension index =actual value – minimum value

maximum value – minimum value

The index is then calculated as the arithmetic average of the three valuesfor each country. The goalposts used for calculating the EDI in 2002 areas follows:

Indicator Maximum value Minimum valuePer capitacommercial energy use (toe) 9.4 (Bahrain) 0.01 (Togo)

Share of commercial 100 (Israel/Kuwait/ 8 (Ethiopia)energy use (%) Singapore)

Electrification rate (%) 100 (15 countries) 2.6 (Ethiopia)

Box 10.3: The IEA Energy Development Index

This is a first effort to produce an index of energy development. We havedecided to introduce it here to encourage thinking about the role of energy asa contributory factor in development, rather than simply a consequence.

329-Chap10 8/10/04 10:32 Page 342


10

7. 2002 is the last year for which detailed energy data and human development indices are availablefor developing countries.

We have calculated EDI scores for 75 developing countries for which energydata are available, using 2002 data.7 Figure 10.6 shows selected developingcountries according to their EDI rankings. Detailed results are shown inTable 10.5. Ethiopia and Myanmar are the least developed countries in energyterms. The Middle Eastern and medium-income Latin American countries aregenerally ranked highest, reflecting their high rates of household electrification– often the result of large subsidies – and their limited use of traditionalbiomass. The sub-Saharan African countries, with uniformly low householdincomes and electrification rates, are at the bottom of the rankings.

0 0.2 0.4 0.6 0.8 1

BahrainTunisiaBrazilChina

South AfricaIndonesia

IndiaBangladesh

NigeriaMozambique

Ethiopia

EDI

Figure 10.6: Selected Developing Countries Rankedon the Energy Development Index, 2002

Figure 10.7 shows that, as expected, there is a strong correlation between thetwo indices. This correlation is however non-linear, suggesting that the pace ofimprovement in HDI diminishes as the EDI increases. In other words, the twoindices appear to decouple at higher levels of wealth and human development. Although the rankings on the EDI are broadly similar to those on the HDI,there are notable divergences:� Oil-producing countries are generally ranked much higher in energy

development than in human development, reflecting the abundance and lowcost of commercial energy supplies and the large amounts of energy used in

329-Chap10 8/10/04 10:32 Page 343


Commercial Traditional EDI

Rank Country EDI energy use biomass Electrification HDI vs.per capita use Index HDI

index index ranking

1 Bahrain 0.994 0.984 1.000 0.999 0.8432 Kuwait 0.984 0.953 1.000 1.000 0.838 ↑3 Netherlands Antilles 0.896 0.692 1.000 0.995 ..4 Singapore 0.869 0.608 1.000 1.000 0.9025 Brunei 0.858 0.609 0.973 0.992 0.8676 Saudi Arabia 0.854 0.577 1.000 0.984 0.768 ↑7 Iran 0.834 0.552 0.995 0.954 0.732 ↑8 Chinese Taipei 0.801 0.417 1.000 0.988 ..9 Oman 0.791 0.427 1.000 0.946 0.770 ↑10 United Arab Emirates 0.781 0.369 0.999 0.974 0.82411 Libya 0.775 0.341 0.985 0.998 0.79412 Israel 0.773 0.319 0.999 1.000 0.908 ↓13 Tunisia 0.772 0.538 0.827 0.950 0.745 ↑14 Trinidad and Tobago 0.728 0.195 1.000 0.990 0.80115 Venezuela 0.716 0.214 0.994 0.940 0.77816 Malaysia 0.711 0.203 0.958 0.971 0.79317 Argentina 0.698 0.153 0.990 0.950 0.853 ↓18 Algeria 0.693 0.098 0.996 0.985 0.704 ↑19 Jordan 0.686 0.104 0.999 0.955 0.750 ↑20 Lebanon 0.683 0.118 0.972 0.960 0.758 ↑21 Cuba 0.681 0.122 0.963 0.958 0.809 ↓22 Egypt 0.679 0.078 0.983 0.977 0.653 ↑23 Iraq 0.679 0.044 0.999 0.992 ..24 Thailand 0.677 0.211 0.908 0.911 0.76825 Costa Rica 0.672 0.088 0.960 0.970 0.834 ↓26 Brazil 0.662 0.102 0.938 0.946 0.775 ↓27 Syria 0.657 0.106 1.000 0.866 0.710 ↑28 Chile 0.652 0.140 0.846 0.970 0.839 ↓29 Jamaica 0.646 0.138 0.930 0.870 0.76430 Uruguay 0.640 0.066 0.864 0.990 0.833 ↓31 Ecuador 0.635 0.067 0.941 0.897 0.73532 Dominican Republic 0.617 0.083 0.845 0.923 0.73833 Colombia 0.609 0.056 0.871 0.902 0.773 ↓34 China 0.603 0.080 0.738 0.990 0.74535 Philippines 0.594 0.045 0.846 0.891 0.753 ↓36 Panama 0.589 0.091 0.826 0.851 0.791 ↓37 Morocco 0.589 0.035 0.956 0.774 0.620 ↑38 South Africa 0.588 0.226 0.868 0.671 0.666 ↑39 Paraguay 0.541 0.051 0.718 0.853 0.751 ↓40 Bolivia 0.538 0.046 0.916 0.651 0.681

Table 10.5: Energy Development Index for Developing Countries, 2002

329-Chap10 8/10/04 10:32 Page 344


10

Commercial Traditional EDI

Rank Country EDI energy use biomass Electrification HDI vs.per capita use Index HDI

index index ranking

41 Peru 0.532 0.037 0.804 0.757 0.752 ↓42 Yemen 0.504 0.022 0.988 0.503 0.482 ↑43 El Salvador 0.489 0.050 0.648 0.769 0.720 ↓44 Guatemala 0.458 0.035 0.496 0.844 0.64945 Honduras 0.420 0.033 0.625 0.601 0.67246 Namibia 0.414 0.051 0.844 0.347 0.60747 Indonesia 0.412 0.054 0.656 0.525 0.692 ↓48 Vietnam 0.409 0.024 0.406 0.797 0.691 ↓49 Sri Lanka 0.409 0.025 0.555 0.645 0.740 ↓50 North Korea 0.407 0.082 0.940 0.200 ..51 Pakistan 0.387 0.030 0.601 0.530 0.497 ↑52 Gabon 0.333 0.061 0.460 0.479 0.64853 India 0.332 0.034 0.519 0.444 0.59554 Nicaragua 0.326 0.032 0.482 0.466 0.667 ↓55 Ghana 0.304 0.016 0.412 0.485 0.56856 Côte d'Ivoire 0.290 0.014 0.349 0.507 0.399 ↑57 Senegal 0.280 0.016 0.510 0.314 0.437 ↑58 Bangladesh 0.267 0.010 0.528 0.263 0.50959 Cameroon 0.253 0.014 0.338 0.407 0.50160 Zimbabwe 0.251 0.032 0.311 0.409 0.49161 Haiti 0.244 0.009 0.389 0.335 0.46362 Nigeria 0.238 0.021 0.246 0.449 0.46663 Sudan 0.229 0.013 0.365 0.310 0.505 ↓64 Benin 0.205 0.010 0.357 0.248 0.42165 Congo 0.189 0.008 0.364 0.196 0.49466 Zambia 0.179 0.018 0.335 0.184 0.38967 Togo 0.176 0.001 0.359 0.170 0.495 ↓68 Eritrea 0.165 0.005 0.305 0.184 0.43969 Angola 0.149 0.022 0.373 0.050 0.38170 Nepal 0.131 0.005 0.129 0.259 0.504 ↓71 Kenya 0.124 0.012 0.271 0.091 0.488 ↓72 DR of Congo 0.118 0.008 0.262 0.083 0.36573 Mozambique 0.107 0.009 0.226 0.087 0.35474 Myanmar 0.091 0.007 0.217 0.050 0.551 ↓75 Ethiopia 0.037 0.002 0.084 0.026 0.359

↑↑ EDI rank is more than 5 ranks higher than HDI ↓↓ EDI rank is more than 5 ranks lower than HDI.. Not available.Sources: IEA analysis; UNDP (2004).

329-Chap10 8/10/04 10:32 Page 345


energy-production and related industries. Saudi Arabia’s EDI, for example,is much higher than Brazil’s, but its HDI is lower.

� EDI rankings in Latin America are generally lower than those for humandevelopment, despite fairly high electrification rates and low use oftraditional biomass. Very low per capita energy consumption accounts for thisdivergence.

� Most sub-Saharan African countries have low scores on both indices,whether they have abundant energy resources or not.

Prospects for Energy DevelopmentEDI Projections to 2030Based on the Reference Scenario projections described in earlier chapters ofthis Outlook, EDI scores are expected to continue to rise in all developing regions.The index for developing countries as a whole is projected to rise from 0.48in 2002 to 0.57 in 2030. The biggest increases are expected to occur in Africa andIndia (Figure 10.8). In 2030, these two regions will, nonetheless, remain the mostunder-developed in energy terms, and the Middle East and Latin America themost developed. By the end of the projection period, most of the developingregions will remain well below the stage of energy development reached byOECD countries three decades ago. The exception will be the Middle East,which will have reached exactly that level by 2030.

0

0.2

0.4

0.6

0.8

1.0

0 0.2 0.4 0.6 0.8 1.0

EDI

HD

I

Mozambique

Ethiopia Côte d'Ivoire

Nigeria SenegalNepal

Myanmar Morocco

Pakistan Yemen

Sri Lanka

Nicaragua

GhanaSouth Africa

India

Egypt

ChileUruguay

IranSaudi Arabia

Kuwait

Bahrain

SingaporeIsrael

Argentina

Figure 10.7: EDI and HDI in Developing Countries, 2002


329-Chap10 8/10/04 10:32 Page 346


10

In all regions, each of the three dimensions included in the EDI increases in linewith rising incomes. Per capita energy consumption and the share of commercialenergy in total final consumption are projected to grow steadily throughout theprojection period.8 Average per capita consumption in developing countries willrise from 0.82 tonnes of oil equivalent in 2002 to 1.2 toe in 2030. The share ofcommercial energy will rise from 80% to 88% over the same period. The numberof people relying on traditional fuels for cooking and heating will, nonetheless,grow, from just under 2.4 billion in 2002 to over 2.6 billion in 2030 (Table 10.6).9

The share of India and Africa together in the total number of these people willgrow from just over half to almost two-thirds. The proportion of the populationusing traditional fuels will remain highest in sub-Saharan Africa.

Electrification rates will also rise over the projection period, from 66% ofthe population of developing countries in 2002 to 78% in 2030 (Table 10.7).10

In the Middle East, North Africa, East Asia and Latin America, electrification

0.2

0.3

0.4

0.5

0.6

0.7

0.8

Africa India China Brazil Middle East

EDI

2002 2015 2030

OECD EDI average in 1971

Figure 10.8: Outlook for Energy Development Index by Region

Note: In the absence of historical data for electricity access, the EDI for IEA countries in 1971 is based on anassumed average electrification rate of 90%.

8. See Chapter 8 for a detailed discussion of these trends.9. The estimates of the number of people relying on biomass for cooking and heating are based onthe assumption that biomass demand per capita in each region is constant over the Outlook periodat 2002 levels. This is a conservative assumption, establishing a lower limit on the number of peoplewho rely on biomass for cooking and heating. The energy demand projections for biomass take intoaccount technological factors that increase the efficiency of biomass use.10. Our projections of electrification rates are prepared using the electrification module of the IEA’sWorld Energy Model (described in Annex C). These projections are determined by many factors,including incomes, fuel prices, population growth and technological advances.

329-Chap10 8/10/04 10:32 Page 347


2002 2015 2030

Africa 36 44 58North Africa 94 98 99Sub-Saharan Africa 24 34 51

South Asia 43 55 66East Asia and China 88 94 96Latin America 89 95 96Middle East 92 96 99

Developing countries 66 72 78

Table 10.7: Electrification Rates by Region (%)

rates will approach 100%. Although rates will improve substantially in sub-Saharan Africa and South Asia, they will remain relatively low. By 2030, halfthe population of sub-Saharan Africa will still be without electricity. Despite rising electrification rates, the total number of people withoutelectricity will fall only slightly, from 1.6 billion in 2002 to just under 1.4 billionin 2030 (Figure 10.9). In fact, 2 billion more people will gain access toelectricity, but this will be largely offset by rising world population. Most of thenet fall of 200 million people who will lack electricity will occur after 2015.The number of people without electricity will fall in Asia, but will continue toincrease in Africa, peaking at just under 600 million by the end of the 2020s.These projections are highly dependent on incomes and on electricity-pricingpolicies, which determine the affordability of electricity. Investment inelectricity-supply infrastructure and rates of rural-urban migration are alsoimportant factors. Access to electricity will remain easier in urban areas, but the

2002 2015 2030

Africa 646 805 996South Asia 746 844 883

India 595 665 693East Asia and China 925 829 693

China 704 618 505Latin America 79 68 60

Developing countries 2 398 2 549 2 634

Table 10.6: Population Relying on Traditional Biomassfor Cooking and Heating (millions)

Note: Middle East is not included as the numbers are negligible.

329-Chap10 8/10/04 10:32 Page 348


10

Figure 10.9: Electricity Deprivation (million)

absolute number of people without electricity will increase slightly in townsand cities, while it will fall in the countryside with continuing rural-urbanmigration (Figure 10.10). Detailed projections of electrification rates by urbanand rural areas can be found in Table 10.A4 at the end of this chapter. The EDI projections point to the prospect of considerable advances in humandevelopment in all major regions, even though big differences among regionswill remain. Expected improvements in living standards in the developingcountries depend on heavy investment in energy-supply infrastructure, both toproduce for export and for domestic supply. The capital required will representa sizable proportion of total savings in many regions, especially Africa (IEA,2003). Other sectors, of course, will also be making large claims on thesecountries’ limited financial resources. Much of the funding will, therefore, needto come from abroad in the form of direct investment and development aid.The latter will need to play an important role in the poorest countries, wherethe lack of existing infrastructure and a poor commercial environment aremajor deterrents to inward investment.

329-Chap10 8/10/04 10:32 Page 349


Energy Development and the Millennium Goals

In the year 2000, the United Nations adopted eight “Millennium DevelopmentGoals”, the first of which was to eradicate extreme poverty (Box 10.4). One of thetwo targets established to measure progress in achieving this goal was halving theproportion of people living on less than $1 a day by 2015. Because of the stronglink between income and access to electricity, meeting this target implies anenormous increase in electrification rates in very poor countries. Put another way,past experience shows that much higher rates of access would normally beexpected to accompany the considerable improvement in prosperity thatachievement of the poverty-reduction goal would imply. Indeed, expandingelectricity access would directly contribute to that objective.

In our Reference Scenario, the overall number of people without electricity in2015 will still be just under 1.6 billion – practically unchanged from today. Thisfinding suggests that, in the absence of rigorous new policies, the target of halvingthe proportion of people living on less than $1 a day is very unlikely to be met. Weestimate that achieving it would need to be accompanied by a reduction of600 million in the number of people without electricity, to about 1 billion.11

Almost all those people would be in South Asia and sub-Saharan Africa(Table 10.8). By 2015, electrification rates will be close to 100% in all otherregions. We estimate that the additional investment needed to bring electricity to

Urban population without electricity Rural population without electricity

0

400

800

mill

ion

1 200

1 600

2002 2030

Figure 10.10: World Population without Electricity in Rural and Urban Settings

11. The energy implications of halving poverty in 2015 are projected using regression analysis,applied to each region. The relationships between poverty, energy consumption and electrificationrates are based on a cross-country analysis covering 100 countries.

329-Chap10 8/10/04 10:32 Page 350


10

In September 2000, the member states of the United Nations adopted whatthey called the “Millennium Declaration”. Following consultations withthe World Bank, the International Monetary Fund, the OECD and thespecialised agencies of the United Nations, the General Assembly recognisedeight specific goals as part of the road map for implementing the declaration: 1. Eradicate extreme poverty and hunger.2. Achieve universal primary education.3. Promote gender equality and empower women.4. Reduce child mortality.5. Improve maternal health.6. Combat HIV/AIDS, malaria, and other diseases.7. Ensure environmental sustainability.8. Develop a global partnership for development.Yardsticks were established for measuring results and targets for 2015. Theyconcern not just developing countries but also the rich countries that arehelping to fund development programmes and the internationalorganisations that are helping countries implement them.

Box 10.4: The UN Millennium Development Goals

AdditionalPopulation without electricity (million) cumulative

2015 2015 investment,2002 Reference MDG Difference 2003-2015

Scenario Case* ($ billion)

Africa 536 601 453 148 46North Africa 9 3 1 2 1Sub-Saharan Africa 526 598 452 146 45

South Asia 798 773 417 355 104East Asia and China 221 127 100 28 22Latin America 46 27 5 22 28Middle East 14 9 5 3 3

Total 1 615 1 537 981 557 202

Table 10.8: Impact of Meeting MDG Poverty-Reduction Target on the Numberof People without Electricity and Investment in Developing Countries

* Assumes that the Millennium Development Goal of reducing by half the proportion of the population livingon less than $1 per day by 2015 is achieved.

329-Chap10 8/10/04 10:32 Page 351


these 560 million people would be about $200 billion. This is equal to 10% of thetotal cumulative investment in the electricity sector in developing countries thatwe estimate from 2003 to 2015. Three-quarters of this additional finance wouldbe needed in sub-Saharan Africa and South Asia.

In a similar way, the achievement of the Millennium Development Goalswould most likely require a substantial reduction in the use of traditionalbiomass for cooking and heating. The amount of biomass consumption isusually a function of how poor a country is and of the relative availability ofcommercial and non-commercial fuels. In our Reference Scenario, the numberof people relying almost entirely on traditional biomass for cooking andheating will increase slightly from 2.40 billion in 2002 to over 2.55 billion in2015. Our analysis suggests that if the poverty-reduction target is met, thenumber would need to be reduced to under 1.85 billion. To accomplish this,governments would need to take new measures to extend the use of moderncooking and heating fuels to more than 700 million people from 2002to 2015.

Figure 10.11 summarises the implications of meeting the poverty-reductiontarget for electricity access and traditional biomass use. Increased electricityaccess and reduced biomass use would also help achieve other MillenniumDevelopment Goals (UNDP/UNDESA/WDC, 2004).

0

500

1 000

1 500

2 000

2 500

People without electricity People relying on traditional biomass

mill

ion

peop

le

2002 2015 Reference Scenario 2015 MDG target

People to gainaccess toelectricity toreach MDG

People to switch away fromtraditionalbiomass toreach MDG

Figure 10.11: The Energy Implications of Halving Povertyin Developing Countries by 2015

329-Chap10 8/10/04 10:32 Page 352


10

Policy Implications The analysis and projections described above provide a compelling argumentfor decisive action to accelerate the process of energy development in poorcountries. Sitting back and waiting for people to become richer as the globaleconomy expands will not be enough. Developing countries are unlikely to seetheir incomes and living standards increase without a concomitant increase intheir use of modern energy services. Energy development is, of course, an effectof economic growth and development. But energy is also a cause. Energy-poverty levels vary widely among the developing countries. Yet, even for themost advanced among them in energy terms, there is much to be done. If thevicious circle of energy poverty and human under-development is to be broken,governments must act to improve the availability and affordability of modernenergy services, especially electricity.

Good governance in the energy sector is critical to attracting infrastructureinvestment. Effective competitive markets give consumers choice and drivedown costs. Creating such markets means removing controls on the pricing ofpetroleum products and other tradeable forms of energy. It means establishingcost-based regulation of energy-network services, and those services must be paidfor. Laws and regulations that impede energy trade and investment have to bereformed. And various measures to attract private capital should be considered.From now to 2030, the developing countries as a whole need to secure about$5 trillion in financing for electricity generation, transmission and distribution.Where public funding is limited, private investors will be called upon to providethe lion’s share of this capital. Where companies remain state-owned, they shouldbe compelled to compete on an equal footing with private companies.

Public policies aimed at improving both the quantity and quality of energyservices need to be backed by broader policies to promote investment, growthand productive employment. These include rural infrastructure development,training and education, and support for micro-credit programmes. Moregenerally, efforts are needed to strengthen the overall legal, institutional andregulatory framework, including the protection of land and property rights.Existing laws and regulations need to be enforced more effectively. In manydeveloping countries, there is a long way to go in applying and respecting thebasic principles of good governance.

At the household level, policies need to focus on ways of increasing access to andthe affordability of fuels for cooking and heating and of electricity. Policies shouldalso aim to promote more efficient use of all fuels. In practice, a primary objectiveshould be to expand the distribution of petroleum-based fuels and, whereavailable, natural gas. Governments should promote the use of energy-efficientcook-stoves, water pumps and other appliances. And electricity services should beextended to households not yet connected to the grid. Where it is uneconomical

329-Chap10 8/10/04 10:32 Page 353


to extend the electricity grid to rural areas, the most appropriate solution willoften be small-scale generators. In many cases, the cheapest fuel will be diesel orLPG, though renewable energy technologies such as photovoltaic panels andwind power may, in some cases, offer a more suitable option.

As a rule, subsidies to energy services are ineffective, economically inefficientand contrary to good environmental practice. But subsidies may be justified insome cases in order to combat poverty. They should be resorted to underspecific conditions: be properly targeted and affordable; deliver quantifiablebenefits; be easily administered and not cause large economic distortions; betransparent and limited in duration (IEA, 1999; UNEP, 2004). The way asubsidy is applied is critical to how effective it is and to its cost. Subsidiesshould normally be restricted to energy services provided through fixednetworks: electricity, natural gas or district heat. Subsidies to other forms ofenergy, such as oil products, can never be properly limited to poorhouseholds, because those fuels are freely traded. Policies should target the“poor” very precisely so that the mechanism for subsidising a particular fueldoes not allow richer households to benefit from the subsidy.

The case for subsidising electrification in poor developing countries is widelyaccepted in principle, since the developmental benefits are often judged toexceed the long-run costs involved in providing subsidised electricity. Wherehigh up-front connection charges prevent poor people from gaining access toelectricity, “lifeline rates” – special low rates for small users – can be a cost-effective way of making services affordable to poor households. Alternatively,governments can finance part of the connection charge or oblige utilities tospread the cost out over time. The challenge is to ensure that electricitysubsidies increase access for the poor at the lowest cost, while ensuring thatelectricity utilities are still able to make money and to continue to invest. Thatmeans limiting the size of subsidies and the number of recipients, andcompensating the utility for any loss of revenue. This can be done eitherthrough higher charges for other customer categories or direct financialtransfers from the government budget.

By improving efficiency and encouraging investment, electricity-sectorreforms can speed up the pace of electrification, while improving the qualityand lowering the cost of supply. Many developing countries have launchedsuch reforms, but few have implemented them fully. Cost-reflective pricing andeffective billing systems are vital to the financial health of electricity companiesand to their ability to sustain investment. In countries such as India, theft andunmetered connections deprive the state-owned power companies of moneythat could be used to upgrade and extend the grid. But it can be very difficult,politically and socially, to raise prices and enforce the payment of bills. Manydeveloping countries have tried to open up their electricity sectors to private

329-Chap10 8/10/04 10:32 Page 354


10

capital from domestic and foreign sources. But such investment has slumpedsince 1997, because of poor returns and uncertainty about possible regulatorydevelopments (IEA, 2003). Official development assistance has also fallen sincethe mid-1990s (UNDP/UNDESA/WEC, 2004).Clearly, policy reforms and development priorities must be tailored to eachcountry’s situation. In the poorest African and Asian countries at the bottomof the EDI rankings, relying predominantly on private capital to developenergy infrastructure from scratch is unlikely to succeed, because of the risksinvolved. One way forward for these countries may be to establish public-private partnerships between host-country governments, donors, multi-lateraldevelopment banks, non-governmental organisations and private companies.The rich industrialised countries have obvious long-term economic, politicaland energy-security interests in helping developing countries along the path toenergy development. For, so long as poverty, hunger and disease persist, thepoorest regions will remain vulnerable to social and political instability and tohumanitarian disasters. The cost of providing assistance to poor countries mayturn out to be far less than that of dealing with the instability and insecuritythat poverty breeds.

329-Chap10 8/10/04 10:32 Page 355

329-Chap10 8/10/04 10:32 Page 356


10

APPENDIX TO CHAPTER 10:ELECTRIFICATION TABLES

ContentsTable 10.A1 – Urban, Rural and Total Electrification Rates by Region, 2002

Tables 10.A2 – Electricity Access in 2002 (country-by-country database)

� Africa

� Developing Asia

� Latin America

� Middle East

Table 10.A3 – Electrification Rate Projections by Region

Table 10.A4 – Projections of Urban and Rural Electrification Rates by Region

Definitions and ApproachElectricity Access

There is no single internationally-accepted definition for electricity access. Thedefinition used here covers electricity access at the household level, that is, thenumber of people who have electricity in their home. It comprises electricitysold commercially, both on-grid and off-grid. It also includes self-generatedelectricity for those countries where access to electricity has been assessedthrough surveys by government or government agencies. The data do notcapture unauthorised connections. The main data sources are listed in thetables. Each data point has been validated through a consistency-check processamong different data sources and experts. The electrification rates shown inthis appendix indicate the number of people with electricity access as apercentage of total population. Rural and urban electrification rates have beencollected for most countries. Only the regional averages are shown in thispublication. More information on the IEA’s work on energy and developmentis available at http://www.worldenergyoutlook.org/poverty.

Where country data appeared contradictory, outdated or unreliable, the IEASecretariat made estimates based on cross-country comparisons, earlier surveys,information from other international organisations, annual statistical bulletins,publications and journals. Population and Urban/Rural Breakdown Projectionsare from World Population Prospects – The 2002 Revision, published by theUnited Nations Population Division.

329-Chap10 8/10/04 10:32 Page 357


For the projections of electrification rates to 2030, a detailed model was usedfor sub-Saharan Africa, India and other South Asia. The electrification moduleis part of the IEA’s World Energy Model.The projections for African and South Asian regions are quantified usingregional regressions based on several determinants: income, population growth,fuel prices, urbanisation rates, poverty levels, present and past electrificationrates and electricity and biomass consumption figures. For the other regionswhere electrification exceeds 85% in 2002, a linear model was used based ongross domestic product and population growth, as well as on past electrificationgrowth rates. The projections of electricity and biomass consumption are basedon the World Energy Model described in Annex C.

Biomass UseData on biomass consumption are from IEA statistics, Energy Balances ofNon-OECD Countries, 2004 edition. UN-FAO data are used for informationon forest coverage and estimates of biomass supply. Biomass and traditionalbiomass are defined in Annex E. Projections for both biomass and traditionalbiomass energy demand by region/country are modelled in the World EnergyModel and presented in Annex A.

AbbreviationsADIAC - Agence d'Information d'Afrique CentraleAFREPREN - African Energy Policy Research NetworkAPERC - Asia Pacific Energy Research Centre AREED - African Rural Energy Enterprise DevelopmentDOE - U.S. Department of Energy DHS - Demographic and Health SurveysEEPCo - Ethiopian Electric Power Corporation ESMAP - Energy Sector Management Assistance ProgrammeGNESD - Global Network on Energy for Sustainable DevelopmentMEMR - Ministry of Energy and Mineral Resources, IndonesiaOECD - Organisation for Economic Co-operation and DevelopmentOLADE - Latin American Energy AssociationUNDP - United Nations Development ProgrammeUSAID - The United States Agency for International Development

329-Chap10 8/10/04 10:32 Page 358


10

Tabl

e 10.

A1:U

rban

, Rur

al a

nd T

otal

Ele

ctri

ficat

ion

Rat

es b

y R

egio

n, 2

002

Popu

latio

n U

rban

Po

pula

tion

Popu

latio

nEl

ectr

ifica

tion

Urb

anRu

ral

popu

latio

nw

ithou

tw

ithra

teel

ectr

ifica

tion

elec

trifi

catio

nel

ectr

icity

elec

tric

ityra

tera

tem

illio

nm

illio

nm

illio

nm

illio

n%

%%

Nor

th A

frica

143

749

134

93.6

98.8

87.9

Sub-

Saha

ran

Afric

a68

824

252

616

223

.651

.58.

4

Afric

a83

131

653

529

535

.562

.419

.0

Chi

na an

d Ea

st As

ia1

860

725

221

1 63

988

.196

.083

.1So

uth

Asia

1 39

639

079

859

842

.869

.432

.5

Dev

elop

ing

Asia

3 25

51

115

1 01

92

236

68.7

86.7

59.3

Latin

Am

erica

428

327

4638

289

.297

.761

.4M

iddl

e Eas

t17

311

414

158

91.8

99.1

77.6

Dev

elop

ing

coun

trie

s4

687

1 87

21

615

3 07

265

.585

.352

.4

Tran

sitio

n ec

onom

ies a

nd O

ECD

1 49

21

085

71

484

99.5

100.

098

.2

Wor

ld6

179

2 95

61

623

4 55

673

.790

.758

.2

329-Chap10 8/10/04 10:32 Page 359


Tabl

e 10.

A2:E

lect

rici

ty A

cces

s in

2002

- Af

rica

Ele

ctri

fica

tion

Popu

lati

onPo

pula

tion

rate

wit

hout

wit

hSo

urce

sel

ectr

icit

yel

ectr

icit

y%

mill

ion

mill

ion

Ang

ola

5.0

12.5

0.7

DO

E C

ount

ry A

naly

sis

Bri

ef, A

FRE

PRE

N (2

001)

Ben

in24

.84.

91.

6E

SMA

P, D

HS

(200

1)B

otsw

ana

26.4

1.3

0.5

DO

E C

ount

ry B

rief

on

Sout

hern

Afr

ica

(200

4), A

FRE

PRE

N (2

000)

Bur

kina

Fas

o10

.011

.41.

3O

EC

D (2

003)

, ESM

AP

(199

8/99

)C

amer

oon

40.7

9.3

6.4

DH

S (1

998)

Con

go19

.62.

90.

7A

DIA

C

Côt

e d'

Ivoi

re50

.78.

18.

3D

HS

(199

8/99

)D

R C

ongo

8.3

46.9

4.3

GN

ESD

(200

4)E

ritr

ea18

.43.

30.

7A

FRE

PRE

N (2

001)

Eth

iopi

a2.

667

.21.

8A

FRE

PRE

N (2

001)

, EE

PCo,

DH

S (2

000)

Gab

on47

.90.

70.

6E

SMA

P (2

000)

Gha

na48

.510

.59.

9A

RE

ED

, ESM

AP

(199

8), D

HS

(199

8)K

enya

9.1

28.7

2,9

AFR

EPR

EN

(200

1), E

SMA

P (1

998)

, DH

S (1

998)

Leso

tho

5.0

1.7

0.1

GN

ESD

(200

4)M

adag

asca

r8.

315

.51.

4G

NE

SD (2

004)

Mal

awi

5.8

11.2

0.7

AFR

EPR

EN

(200

1), D

HS

(200

0)M

auri

tius

100

0.0

1.2

AFR

EPR

EN

(200

1)M

ozam

biqu

e8.

716

.91.

6A

FRE

PRE

N (2

000)

Nam

ibia

34.7

1.3

0.7

AFR

EPR

EN

(200

0), D

HS

(200

0)N

iger

ia44

.966

.654

.3E

SMA

P (1

999)

329-Chap10 8/10/04 10:32 Page 360


10

Sene

gal

31.4

6.8

3.1

GN

ESD

(200

4), A

RE

ED

, DH

S (1

999)

Sout

h A

fric

a67

.114

.730

.0A

FRE

PRE

N (2

001)

, ESM

AP

(199

8)Su

dan

31.0

22.7

10.2

AFR

EPR

EN

(200

0)Ta

nzan

ia9.

233

.03.

3A

FRE

PRE

N (2

001)

, AR

EE

D, D

HS

(199

9), H

elio

Int

erna

tion

al (2

002)

Togo

17.0

4.0

0.8

ESM

AP

(199

8)U

gand

a4.

024

.01.

0A

FRE

PRE

N (2

001)

, Uga

ndan

Gov

ernm

ent,

ESM

AP

(200

0/01

)Z

ambi

a18

.48.

72.

0A

FRE

PRE

N (2

001)

, DH

S (2

001/

02)

Zim

babw

e40

.97.

65.

3A

FRE

PRE

N (2

001)

, DH

S (1

999)

Oth

er A

fric

a7.

083

.96.

3Se

cret

aria

t est

imat

e

Sub-

Saha

ran

Afr

ica

23.5

526.

316

1.6

Alg

eria

98.5

0.5

30.8

Min

istr

y of

Ene

rgy

and

Min

ing

Egy

pt97

.71.

664

.8U

SAID

, DH

S (2

000)

Liby

a99

.80.

05.

4Se

cret

aria

t est

imat

eM

oroc

co77

.46.

823

.3M

inis

try

of E

nerg

y an

d M

ines

, Off

ice

Nat

iona

l de

l'Ele

ctri

cité

Tuni

sia

95.0

0.5

9.2

ESI

Afr

ica,

Ins

titu

t Nat

iona

l de

la S

tati

stiq

ue

Nor

th A

fric

a93

.69.

313

3.6

Afr

ica

36.0

535.

629

5.2

329-Chap10 8/10/04 10:32 Page 361


Tabl

e 10.

A2:E

lect

rici

ty A

cces

s in

2002

- D

evel

opin

g A

sia

Ele

ctri

fica

tion

Popu

lati

onPo

pula

tion

rate

wit

hout

wit

hSo

urce

sel

ectr

icit

yel

ectr

icit

y%

mill

ion

mill

ion

Chi

na99

.012

.91

275.

3Se

cret

aria

t est

imat

eB

rune

i99

.20.

00.

3A

PER

CC

ambo

dia

18.3

11.3

2.5

GN

ESD

(199

8), D

HS

(200

0)C

hine

se T

aipe

i98

.80.

322

.2Se

cret

aria

t est

imat

eD

PR K

orea

20.0

18.0

4.5

Secr

etar

iat e

stim

ate

Indo

nesi

a52

.510

0.5

111.

2PL

N S

tati

stik

s 20

02 (2

003)

, ME

MR

(200

2), G

NE

SD (2

004)

, DH

S (2

002/

03)

Mal

aysi

a97

.10.

723

.3G

NE

SD (2

000)

Mon

golia

90.0

0.3

2.3

Hel

io I

nter

nati

onal

(200

0)M

yanm

ar5.

046

.42.

4G

NE

SD (2

000)

Phili

ppin

es89

.18.

769

.8G

NE

SD (2

004)

, DH

S (1

998)

Sing

apor

e10

0.0

0.0

4.2

GN

ESD

(200

0)T

haila

nd91

.15.

556

.6G

NE

SD (2

004)

Vie

tnam

79.6

16.3

63.9

GN

ESD

(200

1), D

HS

(200

2)O

ther

Asi

a80

.00.

00.

2Se

cret

aria

t est

imat

e

Chi

na a

nd E

ast

Asi

a 88

.122

1.0

1 63

8.8

Afg

hani

stan

2.0

22.5

0.5

Wor

ld B

ank,

DO

E C

ount

ry A

naly

sis

Bri

ef, U

ND

PB

angl

ades

h26

.310

0.5

35.8

GN

ESD

(200

0), B

angl

ades

h Po

wer

Dev

elop

men

t Boa

rd, U

SAID

, DH

S(19

99/0

0)In

dia

44.4

582.

646

5.9

GN

ESD

(200

0), D

HS

(199

8/99

), I

ndia

n C

ensu

s (2

001)

Nep

al25

.917

.96.

2G

NE

SD (2

000)

, ESM

AP,

DH

S (2

001)

Paki

stan

53.0

68.1

76.7

GN

ESD

(200

0)Sr

i Lan

ka65

.56.

512

.4G

NE

SD (2

001)

Sout

h A

sia

42.8

798.

059

7.6

Dev

elop

ing

Asi

a68

.71

019.

02

236.

4

329-Chap10 8/10/04 10:32 Page 362


10

Tabl

e 10.

A2:E

lect

rici

ty A

cces

s in

2002

- La

tin A

mer

ica

Ele

ctri

fica

tion

Popu

lati

onPo

pula

tion

rate

wit

hout

wit

hSo

urce

sel

ectr

icit

yel

ectr

icit

y%

mill

ion

mill

ion

Arg

enti

na95

.01.

936

.1G

NE

SD (2

004)

, OL

AD

E (1

998)

Bol

ivia

65.1

3.0

5.6

DH

S (1

998)

, OL

AD

E (2

002)

Bra

zil

94.6

9.5

165.

1O

LA

DE

(199

9)C

hile

97.0

0.5

15.1

APE

RC

(200

1)C

olom

bia

90.2

4.3

39.3

DH

S (2

000)

Cos

ta R

ica

97.0

0.1

4.0

OL

AD

E (2

002)

Cub

a95

.80.

510

.8O

LA

DE

(200

2)D

omin

ican

Rep

ublic

92.3

0.7

8.0

DH

S (2

002)

, OL

AD

E (2

002)

Ecu

ador

89.7

1.3

11.5

OL

AD

E (2

002)

El S

alva

dor

76.9

1.5

4.9

GN

ESD

(200

4), O

LA

DE

(200

1)G

uate

mal

a84

.41.

910

.2E

SMA

P (1

998/

99),

DH

S (1

998/

99),

OL

AD

E (2

002)

Hai

ti33

.55.

52.

8D

HS

(200

0), O

LA

DE

(199

7)H

ondu

ras

60.1

2.7

4.1

OL

AD

E (2

002)

Jam

aica

87.0

0.3

2.3

OL

AD

E (2

002)

Net

herl

ands

Ant

illes

99.5

0.0

0.2

Secr

etar

iat e

stim

ate

Nic

arag

ua46

.62.

82.

5O

LA

DE

(200

2), D

HS

(200

1), G

loba

l Env

iron

men

t Fac

ility

(200

1)Pa

nam

a85

.10.

52.

6O

LA

DE

(200

0)Pa

ragu

ay85

.30.

84.

9O

LA

DE

(200

2)Pe

ru75

.76.

520

.3O

LA

DE

(200

2), G

NE

SD (2

004)

, DH

S (2

000)

, APE

RC

(200

0)Tr

inid

ad a

nd T

obag

o99

.00.

01.

3O

LA

DE

(199

7)U

rugu

ay99

.00.

03.

4O

LA

DE

(199

7)V

enez

uela

94.0

1.5

23.7

OL

AD

E (2

002)

Oth

er L

atin

Am

eric

a87

.00.

53.

3Se

cret

aria

t est

imat

e

Lat

in A

mer

ica

89.2

46.3

381.

7

329-Chap10 8/10/04 10:32 Page 363


Tabl

e 10.

A2:E

lect

rici

ty A

cces

s in

2002

- M

iddl

e Ea

st

Ele

ctri

fica

tion

Popu

lati

onPo

pula

tion

rate

wit

hout

wit

hSo

urce

sel

ectr

icit

yel

ectr

icit

y%

mill

ion

mill

ion

Bah

rain

99.9

0.0

0.7

Secr

etar

iat e

stim

ate

Iran

99.2

0.5

64.8

Tava

nir,

Wor

ld E

nerg

y C

ounc

il Ir

aq95

.41.

123

.3Se

cret

aria

t est

imat

e ba

sed

on W

orld

Ban

kIs

rael

100.

00.

06.

5Is

rael

Ele

ctri

c C

orpo

rati

on (2

003)

Jord

an95

.50.

24.

9Se

cret

aria

t est

imat

e ba

sed

on W

orld

Ban

kK

uwai

t10

0.0

0.0

2.1

Secr

etar

iat e

stim

ate

Leba

non

96.0

0.2

4.3

Secr

etar

iat e

stim

ate

base

d on

Wor

ld B

ank

Om

an94

.60.

12.

4Se

cret

aria

t est

imat

eQ

atar

95.6

0.0

0.6

Secr

etar

iat e

stim

ate

Saud

i Ara

bia

98.4

0.4

21.7

Secr

etar

iat e

stim

ate

Syri

a86

.62.

314

.7Se

cret

aria

t est

imat

e ba

sed

on U

ND

PU

nite

d A

rab

Em

irat

es97

.40.

13.

0Se

cret

aria

t est

imat

eYe

men

50.3

9.3

9.4

Secr

etar

iat e

stim

ate

base

d on

Wor

ld B

ank

Mid

dle

Eas

t91

.814

.215

8.4

329-Chap10 8/10/04 10:32 4


10

Tabl

e 10.

A3:E

lect

rific

atio

n R

ate

Proj

ectio

ns b

y R

egio

n (%

)

2002

2010

2015

2020

2030

Nor

th A

fric

a94

9898

9899

Sub-

Saha

ran

Afr

ica

2429

3439

51

Afr

ica

3641

4449

58

Chi

na a

nd E

ast A

sia

8893

9495

96So

uth

Asi

a43

5055

5966

Lati

n A

mer

ica

8993

9595

96M

iddl

e E

ast

9295

9697

99

Dev

elop

ing

coun

trie

s66

7072

7478

Wor

ld74

7778

8083

Tabl

e 10.

A4:P

roje

ctio

ns o

f Urb

an a

nd R

ural

Ele

ctri

ficat

ion

Rat

es b

y R

egio

n (%

)

2002

2010

2015

2020

2030

Urb

anR

ural

Urb

anR

ural

Urb

anR

ural

Urb

anR

ural

Urb

anR

ural

Nor

th A

fric

a99

8810

096

100

9610

096

100

97Su

b-Sa

hara

n A

fric

a52

855

1258

1662

2170

30

Afr

ica

6219

6523

6726

6930

7538

Chi

na a

nd E

ast A

sia

9683

9888

100

8810

088

100

89So

uth

Asi

a69

3373

4077

4481

4688

50La

tin

Am

eric

a98

6110

068

100

7110

073

100

76M

iddl

e E

ast

9978

100

8510

087

100

9010

095

Dev

elop

ing

coun

trie

s85

5288

5789

5890

5992

61

Wor

ld91

5892

6193

6293

6394

65

Tota

l num

ber

of p

eopl

e w

ithou

t ele

ctri

city

(m

illio

n)

275

1 34

728

91

267

290

1 24

929

51

210

287

1 10

6

For

refe

renc

e:

329-Chap10 8/10/04 10:32 Page 365

329-Chap10 8/10/04 10:32 Page 366

chapter 10 · pdf filechapter 10 - energy and development 329 chapter 10 energy and...

Documents