Energy Security Series Part 2: Energy Poverty

Some 840 million people worldwide don’t have to electricity. Photo c/o WEF

Energy poverty can be defined in several ways. In its simplest definition, energy poverty is the lack of access to energy services.

The World Economic Forum (WEF) defines it differently. For the WEF, energy poverty is “the lack of access to sustainable modern energy services and products.”

In his encyclical letter entitled Fratelli Tutti, Pope Francis touched on energy poverty, stressing that “forms of poverty are emerging.” He calls on us to to view poverty differently since the modern world’s current criteria do not correspond to present-day realities. “For example, lack of access to electric energy was not considered a sign of poverty, nor was it a source of hardship. Poverty must always be understood and gauged in the context of the actual opportunities available in each concrete historical period.”

Data from the United Nations (UN) shows that there are some 840 million people who live without access to any electricity worldwide. 

In the Philippines, some 1.62 million households still don’t have access to power. The country’s archipelagic nature makes it challenging to provide electricity for the many remote islands and communities.

We cannot talk of energy security in the Philippines without discussing energy poverty. After all, access to electricity is necessary for economic growth.

A study by the Philippine Institute of Development Studies showed that rural households and rural-based economic agents need electricity to enhance their productivity and expand home-based economic ventures. Having access to electricity is a significant determinant of agricultural productivity. Electricity enables Filipino families to operate their livestock and poultry farms as well as store their produce efficiently. Electricity is necessary for many Filipinos to engage in micro-small businesses to help them get out of poverty.

That’s the economic side. Health-wise, the absence of electricity increases the risk of premature deaths due to household air pollution as many rely on solid fuel for cooking like fuelwood or charcoal. 

The World Health Organization (WHO) estimates that roughly four million die prematurely annually e due to household air pollution from the use of solid fuel for cooking.

As we still have seven percent of Filipino households without access to electricity, what must we do?

To connect the hardest to reach and the poorest households, we must invest in off-grid solutions such as mini-grids, solar home systems, and solar lighting. It has been working for the entire world as according to the World Bank since at least 34 million people in 2017 gained access to basic electricity services via off-grid technologies. At the local level, we have been receiving grants from other countries to develop mini-grids powered by renewables.

Off-grid technologies will not only provide access to electricity to Filipinos but will help cut down electricity costs for off-grid locations.

A study conducted by the Institute for Energy Economics and Financial Analysis (IEEFA) and Institute for Climate and Sustainable Cities (ICSC) concluded that the Philippines can save as much as Php 10 billion if off-grid islands rely on renewable sources than traditional ones.

The study stressed that mini-grids powered by generators running on imported diesel and bunk oil are not only proving to be expensive but have also resulted in blackout and power outages. It noted that Filipino taxpayers are footing a huge bill by subsidizing these expensive imported fuels.

The authors of the study “Electricity-Sector Opportunities in the Philippines: The Case for Wind- and Solar-Powered Small Island Grids” have called for prudent reforms where electric cooperatives and distribution utilities (DUs) will be required to procure cheaper sources to reduce costs.

Similarly, a European Union-funded program, the Access to Sustainable Energy Program (EU-ASEP) also concluded that the National Power Corporation (NPC) can also save roughly Php 2.25 million or Php 4.50 per kilowatt-hour if the agency combines renewable energy with traditional power for off-grid islands’ mini-grids.

Indeed, renewables are also the way to go in giving access to electricity to all Filipinos. 

IEEFA’s recommendation in its study echoes mine as I have been vocal in requiring distribution utilities to testify that there are no available indigenous resources in their franchise area during the procurement stage. We must change regulations as our goal is to provide electricity not regardless of the cost but to provide electricity that’s affordable. 

The DOE has already come up with rules and guidelines on renewable portfolio standards (RPS) for off-grid areas in 2018, which was supposed to be implemented this year. The department, however, has suspended first-year compliance to resolve a variety of issues.

Even if the RPS for off-grid areas is being implemented it’s not enough. I have been advocating for higher levels of renewables in the RPS. 

Our goal is not simply to provide electricity to all but as WEF said to ensure that there is access to modern energy services and products. The dominance of diesel-fired mini-grids should be a thing of the past. 

Advances in technology have driven prices of renewable energy technologies down and it’s time that we benefit from new technologies that make electricity more accessible and affordable. Modern times require us to change regulations as our goal is not only to make electricity accessible to all but to provide affordable electricity to all.

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