Global Electrification:Trends and Challenges

David G. VictorProgram on Energy & Sustainable Development

Stanford University

presented at: Chinese Academy of Social Sciences

18 March 2005

What is Electrification?

At least three definitions:1. Access to Power

2. Use of Power

3. Pervasiveness of Electricity in the Economy

I will focus on #1 and #2.

PESD studies on “Energy Transitions”

• China: CASS Partnership– What explains China’s success with rural electrification?

South Africa: ERC Partnership– MARKAL/TIMES; market failure analysis; new modeling tools;

data assimilation

• India: several partnerships– Energy and Agriculture: general equilibrium modeling– Assessing electrification policies and patterns: peri-urban and

rural– For profit distributed generation (India & Mexico)– Advanced metering and rural grid control

This talk: three points

• Broad Patterns in Electrification–Global, Regional, National & Household

• Evidence on the Causes and Consequences of Electrification

• Industrial Organization & Electricity Policy

1. Broad Patterns in Electrification

Global Access to Electricity:1970 to 2030

People with Access to Electricity

People w/o Access to Electricity

2000 – Total population 6B

Source: World Energy Outlook 2002, IEA

1.6B/27%1.4B /17%

2030 – Total population 8.2B

1970 – Total population 3.7B

1.9B /51%

Regional Electricity Access: Limits

Source: International Energy Agency, WEO 2002

0

100

200

300

400

500

600

700

800

900

1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030

Peo

ple

wit

ho

ut

Ele

ctri

cit

y A

cces

s (

mil

lio

ns)

South Asia (India)

Sub-Saharan Africa

East Asia (China)

Today

% Electrified, Southern Africa (1999): The Rural-Urban Divide

Country Urban RuralBotswana 26 2Lesotho 14 4Malawi 11 <1Mozambique 17 <1Namibia 26 5South Africa 80 46Swaziland 42 2Tanzania 13 1Zambia 18 1Zimbabwe 65 <1

Source: Gaunt, Load Research Programme, Energy Research Centre - Cape Town South Africa,

% Households Electrified by Income Quintile (1988)

0

20

40

60

80

100

120

Vietnam

Nicaragua S. Africa

Income Quintile

% H

ou

seh

old

s E

lec

trif

ied

Source: ESMAP, 2002. Energy Services for the World’s Poor.

1 2 3 4 5 1 2 3 4 5 1 2 3 4 5

Average Energy Demand by Income Segment:Brazil (1988)

Source: adapted from de Almeida and de Oliveira, 1995

0

20

40

60

80

100

120

140

up to 1 1 to 2 2 to 5 5 to 10 10 to 20 20 to 30

Multiples of monthly minimum wages (1=$50)

GJ/y

ear/

ho

use

ho

ld

firewood

liquid fuels

gas

electricity

Some Additional Issues: Measurement & Theory

•Measurement:– (eg.) Village vs. Household electrification in

India: » 85 % villages electrified» 37% households electrified

•Theory:–(e.g.) Is theft an electrification strategy?

Electricity Losses (%), 2001

Source: World Bank World Development Indicators, 2004

0 5 10 15 20 25 30 35 40

Nigeria

India

Zimbabwe

Brazil

Mexico

Indonesia

Thailand

South Africa

China

OECD

2. On the Causes of Electrification

•Economy

•Urbanization

•Policy

Cause (and Consequence): Economic Growth

Consumption of Electric Power and Economic Output, 1999

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

50000

0 5000 10000 15000 20000 25000 30000

Electric Pow er Consum ption (kw h/capita)

Eco

no

mic

Ou

tpu

t (G

DP

/cap

ita,

PP

P)

Norw ay

Luxembourg

Bahrain

FinlandCyprus

United States

Mexico

China

Source: World Development Indicators, 2002 (114 countries reporting both series)

1000 kw h/capita target

Source: World Development Indicators, 2002

Cause: Urbanization (2000)

0

20

40

60

80

100

120

0 20 40 60 80 100 120

% Population Urban

% P

op

ula

tio

n E

lect

rifi

ed

Source: Urban population Data from World Development Indicators, 2004. World Bank. Electrification Rates from World Energy Outlook, 2002. IEA.

Gabon

Thailand

Vietnam

China

0

10

20

30

40

50

60

70

80

90

100

1920 1924 1928 1932 1936 1940 1944 1948 1952 1956

% o

f F

arm

s w

/Ele

ctr

ic S

erv

ice

Source: U.S. Census Bureau

Cause (?): Policy The U.S. Rural Electrification Experience

REA Created

Cause: PolicySouth Africa’s National Electrification Achievement

PAST

FUTURE?PRESENT

FUTURE!FUTURE?

Source: Gaunt, Load Research Programme, Energy Research Centre - Cape Town South Africa,

-3000

-2000

-1000

0

1000

2000

3000

4000

5000

6000

199

0

199

1

199

2

199

3

199

4

199

5

199

6

199

7

199

8

199

9

200

0

200

1

Urban

Rural

(thousands)

Additional Slides

Consequence (?): HealthGlobal Burden of Disease

0 5 10 15 20

Malnutrition

Alcohol use

Tobacco use

Illicit drug use

Unsafe sex or unwanted pregnancy

Hypertension

Physical inactivity

Poor water and sanitation

Occupational hazards

Outdoor air pollution

Indoor air pollution

Source: Smith (2000) and Murray and Lopez (1996), as summarized in WEA (2000).

% of Total

Consequence (?): EducationElectricity Consumption and Literacy (1999)

Consumption of Electric Power and Adult Illiteracy

0

10

20

30

40

50

60

70

0 2000 4000 6000 8000 10000 12000 14000 16000

Electric Power Consumption (kwh/capita)

Ad

ult

Ill

ite

rac

y R

ate

(%

of

tota

l p

op

ula

tio

n

ag

es

15

an

d a

bo

vc

)

Source: Illiteracy rate, adult total (% of people ages 15 and above) (SE.ADT.ILIT.ZS)

Industrial Organization & Policy: Implications for Electrification

• Load Management

• Organization of the Power System

South Africa, estimated typical winter week peak cycle, 2015

Source: Eskom (draft)

South Africa’s Free Electricity Experiment:Measured Effects (7-15 kWh/month)

0

20

40

60

80

100

120

140

160

180

200

220

2000

Q1

2000

Q3

2001

Q1

2001

Q3

2002

Q1

2002

Q3

2003

Q1

Year/Quarter

Co

nsu

mp

tio

n i

n b

in (

kWh

/mo

nth

)

Pilot (Sales + EBSST)

Control (Sales)

Pilot (EBSST)

Source: Gaunt, Load Research Programme, Energy Research Centre - Cape Town South Africa.

Cost-saving Alternatives to Free Electricity: LPG

Peak Co-incidence Factor Annualized Savings (Rand)

100% 401

90% 353

80% 305

70% 258

60% 210

50% 162

Source: Howells et al., 2005. Draft