Access Merit Order - a new tool for effective realization of SDG no. 7

    Dear readers,

     

    Differ has developed a new tool to be used when devising electrification strategies aimed at realizing the SDG no. 7 in terms of universal access to electricity services - with the highest possible development impact.

     

    Introduction:

    The Sustainable Development Goal no. 7 of achieving universal access to affordable, reliable, sustainable and modern energy by 2030 was recently adopted by the UN General Assembly. The fact that the objective is linked to increased access to electricity and not to the increased amount of electricity generated sends a clear message that it is the share of households with access which is assumed to be the true driver of human development. Hence, in order to maximize development impact, focus going forward should be on maximizing access to reliable electricity services for the budget available, rather than maximizing added power generation capacity.

     

    The problem in this context is that the standard analysis frameworks applied by Governments, institutions and donors for developing electrification plans and policies fail to properly capture the development value of access to electricity. The standard Power Merit Order prioritizes projects based on cost per Watt installed or per kilowatt hour (kWh) generated. However, research indicates that the value of a kWh in a development perspective is dependent on its use. The development value is likely higher for one kWh used to provide high quality evening lighting to 60 off-grid households, relative to running one machine wash or 45 minutes of air conditioning for one grid connected household with the same kWh. Hence, as a balance to the Power Merit Order, we have developed the Access Merit Order. Instead of measuring cost per “unit of power” (i.e. per Watt or kWh), this new framework measures cost per “unit of access”. In order to get the highest possible development impact per dollar invested in electrification, the Access Merit Order should be actively used alongside the Power Merit Order when electrification strategies are devised and revised going forward.

     

    Description of the tool:

    Read the 2-page description of the tool here: http://www.differgroup.com/analysis/p/Introducing-Access-Merit-Order-to-reach-Sustainable-Development-Goal-no-7?ctl=Details&did=11&mid=6116

     

    See also the this analysis for more background on the topic: http://www.differgroup.com/analysis/p/The-way-towards-universal-access---Putting-value-on-electricity-services?ctl=Details&did=8&mid=6116

     

    Hope you will find this new approach interesting and useful.

     

    Best regards,

    Tom

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    Tom Erichsen

     

    Differ

    www.differgroup.com

    Mobile: +47 91 67 40 41

    Storgata 26

    N-0184 Oslo

    NORWAY