Energy forum: Energy poverty remains a worldwide challenge

Energy poverty, although concentrated in developing countries, challenges governments around the world, says an official of the International Energy Agency.

Bob Tippee

HOUSTON, Dec. 4 -- Energy poverty, although concentrated in developing countries, challenges governments around the world, says an official of the International Energy Agency.

At a forum Tuesday in Houston, IEA Chief Economist Fatih Birol defined energy poverty in terms of numbers of people lacking access to electricity and relying on traditional biomass fuels for cooking and heating.

After presenting highlights of IEA's recently published World Energy Outlook, Birol said 1.6 billion people have no access to electricity.

Of that total, 580 million are in South Asia, mainly India, and 500 million are in sub-Saharan Africa. Four of every five people lacking access to electricity live in rural areas, Birol added.

By 2030, IEA's forecast horizon, the population lacking electricity will have declined only to 1.4 billion under current regulatory and energy trends.

The number of people reliant upon traditional biomass is 2.4 billion, Birol said. In 2030, the number will have climbed to 2.6 billion if current trends continue.

The IEA economist noted that biomass reliance hinders productivity, health, gender balance, and environmental values.

He said the main challenge in addressing energy poverty is creating conditions favorable to the necessary investment, which is huge. Just to lower the number of people without access to electricity from 1.6 billion to 1.4 billion requires investment in power generation totaling $2.1 trillion, according to IEA.

Uneven access to modern energy is one of four energy challenges Birtol said require worldwide government attention. Others are providing for security of energy supply, encouraging investment, and the reducing the threat of environmental damage.

Birtol spoke at a forum held at Rice University by the James A. Baker III Institute for Public Policy, the Institute for Energy Law and Enterprise at the University of Houston, the International Association for Energy Economics, and Simmons & Co. International.

Panel discussion
During a panel discussion after his remarks, investment conditions and energy poverty received much attention.

"We have incredibly weak frameworks for investment," said Michelle Michot Foss, executive director of the University of Houston Energy Institute.

A study by her group of foreign investment patterns in developing countries revealed heavy resistance to modern practices of international finance.

"The risk of failure is extremely big" when international agencies push investment into countries lacking essential "core institutions," she said.

Amy Myers Jaffe, senior energy advisor at the Baker Institute, said many developing countries lack confidence in "best practices" of international finance and reject what she called "the Washington consensus" about management of international capital flows.

"We really need to take into account these political barriers," she said.

Jaffe pointed to the absence of "a serious search for a breakthrough technology" able to address energy poverty.

Matthew Simmons, chairman and CEO of Simmons & Co., reported findings of a study by his firm of annual per-capita energy consumption patterns.

Energy use ranges downward from 65 boe/person in the US to 50 boe/person in Europe, 33 boe/person in Japan, 10 boe/person in Mexico, 0.8 boe/person in Bangladesh, and 0.7 boe/person in Nigeria.

Mexico's consumption level, he said, is the world's average.

Commissioner Charles Matthews of the Railroad Commission of Texas said a technology is available to deal with the world's rapidly growing need for electricity. But, like investment requirements, it faces political barriers.

"The silver bullet for the short term," Matthews said, "is going to be nuclear."

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