There are currently an estimated 1.3 billion people without access to modern electricity. The UN-driven Sustainable Energy for All (SE4All) initiative has the objective of achieving universal access to modern electricity by 2030. However, no concretely feasible and financially viable solution and strategy has been proposed to date. The International Energy Agency’s (IEA) New Policies Scenario projects about 1 billion people still to be without access to modern electricity service in 2030, and the Energy for All Case estimates a total cost of universal access of USD 1 trillion – way above the actual funding expected to be available.
New approach needed. The approach taken by the IEA and others to designing electrification strategies needs to change as it is too focused on costs per unit of power delivered instead of cost per service delivered, and as it normally does not take budget constraints explicitly into account when designing solutions and strategies to reach the objectives. This analysis by Differ describes how decision-makers should approach the electrification challenge and consequently be able to achieve the objective of universal access to modern electricity services by 2030 – and with the highest possible impact on human and economic development for the funds invested.
The way forward needs to:
- define progress by measuring electricity service levels provided - not power supplied;
- base investment decisions on the expected impact in terms of social and economic value creation per dollar invested - not just the lowest costs per unit of power delivered;
- determine the appropriate blend of electricity service levels to be provided under an explicit and realistic budget constraint.
An approach not following these principles will most likely fail to provide universal access. It will likely lead to major errors in the electrification strategies, inefficient use of limited public money and hundreds of millions of people unnecessarily left without access to modern electricity services in 2030.