Energy Poverty Worldwide
Over the years, Africa has remained the continent with the lowest per capita energy consumption. With a population of about one billion – a number expected to double by 2050 – the continent needs to invest heavily in energy access in order to grow economically and meet the increasing challenges of lifting its people out of poverty. As the graph below shows, Africa’s per capita energy consumption is not even one-half of the world average, a situation that severely constrains the region’s economic growth. As discussed during the OFID Workshop ‘Energy Poverty in Africa’ held in Abuja Nigeria in 2008 “Inadequate access to energy is the most challenging factor facing Africa’s economy growth and productivity.” Indeed, the region’s energy needs are huge, particularly in sub-Saharan Africa, which has the lowest rate of electrification in the world – less than 30 percent, according to the UNDP Human Development Report 2007/2008. Refurbishing and expanding Africa’s power infrastructure will be highly capital intensive, with up-front investment costs estimated at tens of billions of US dollars a year.
Home to more than half the world’s population, the non-OECD Asia region is experiencing the fastest – predominantly fossil fuel-based – energy demand growth of all developing regions. The region currently consumes about one-quarter of global energy, with China accounting for just over half of the total. Although energy poverty today is mostly concentrated in rural areas, energy demand growth will be particularly fast in cities, as urbanization and growing incomes accelerate demand for energy services by urban households. By world standards, non-OECD Asia energy consumption per capita is still very low, as can be seen from the graph below. China’s per capita energy consumption has improved significantly in the last decades and is currently closer to the world average (1.0 vs. 1.4 toe) than the rest of the region. These figures mask important differences among countries and sub-regions. In South Asia, some 50 percent of the population – or 700 million people – lack access to electricity, all but a fraction of them in rural areas. Nearly one billion people – more than half of the sub-region’s population, still rely on biomass for cooking and heating. Hence significant improvement in energy access and consumption is required in some sub-regions in order to achieve faster economic and social growth.
The Middle East
Middle East region exports a very substantial quantity of primary energy to the world. With some 60 percent of total proven world oil reserves and 40 percent of world gas reserves, there is little doubt that the region – an area of low-cost production – will continue to be the world’s main supplier of cost-effective hydrocarbons. Its energy consumption per capita is well above the world average (see graph below), and during the period 1998-2008, consumption in the region grew much faster than the world average. However, there are still inequalities in access to basic energy services in some – mostly non-oil and gas producing – countries of the region. In order for the Middle East to obtain more balanced economic and social development, efforts to increase energy access must concentrate on rural areas and those countries that lack natural energy resources.
Latin America and the Caribbean
As a net exporter of energy, the Latin America and Caribbean (LAC) region has enormous potential in terms of production capacity to satisfy future energy demand. Non-OECD LAC consumes about 5 percent of the world’s total energy output. As shown in the graph, per capita energy consumption is only 70 percent of the world average. Almost 45 million people in LAC still live without modern electricity services, a large percentage of them relying on traditional biomass for cooking and heating. Moreover, LAC’s energy resources are not equally distributed. While some countries supply the world with huge quantities of hydrocarbons, others, notably in the Caribbean, depend almost exclusively on imported fuel oil for electricity generation. Nonetheless, LAC countries do share common challenges, such as developing efficient and sustainable patterns of energy production and consumption, and rural electrification. In rural areas, the electrification rate is estimated at two-thirds, just above the world rural average of approximately 60 percent. In many cases, the extension of existing grids is a key solution. However, this approach is costly and technically complex, often requiring the assistance of regional and multilateral development cooperation agencies.