Jacob writes*
Energy is an integral part of development, anywhere in the world. Research shows, that access to productive energy is crucial for economic growth, but also for education, health, and environmental protection. However, in many countries there are huge inequalities when it comes to access to sustainable and productive energy. In Ethiopia, among the rural population only 51% had access to energy, whereas for urban dwellers it is 93%. Strengthening and intensifying agriculture, the main source of revenue in the periphery, is however crucial for economies and demands an increase of productivity through energy access.
This is the goal of Energizing Development (EnDev), a developmental initiative driven mainly by the Dutch and German developmental agencies. Through market-based measures, it aims to increase both rural supply and demand in energy. In the project “Sustainable Energy for Smallholder Farmers (SEFFA)”, it tries to combat rural poverty and rural-urban energy inequality. Strengthening the private sector to supply better and cheaper products, as well as increasing the capability of customers to pay for installing solar power mini-grids, are on top of the agenda. This is in addition to the social mission EnDev undertakes, which includes empowering women and youth entrepreneurs.
Sounds great, right? However, some aspects of the project are not entirely clear. One of the main aspects of SEFFA is the provision of energy systems through private sector empowerment. But it is opaque how the state is involved in the actual delivery of the project in Ethiopia. Leaving the state on the side, and not increasing its capacity to run similar projects in the future, is dangerous and can in the worst cases even increase inequality in the long run. Additionally, there is low awareness among the rural population about ongoing energy access programs. Other research has shown that empowering marginalized groups among the rural population, most notably women, is crucial for the development of the agricultural sector in rural areas. Increasing their stake in a participatory program is therefore crucial. EnDev’s “target” of having 25% of project beneficiaries being women, does not necessarily ensure active participation, nor does it include accountability mechanisms. As Ethiopia’s economic output has more than tripled in recent decades, it becomes crucial to ensure the equitable provision of services, not only for the duration of ongoing projects but in the form of permanent systemic improvements.
Bottom line: The provision of energy access, which is crucial to development, is unequally distributed in many regions of the world. To combat this inequality and be responsive to social challenges, such as gender inequality, on the long term developmental agencies are required to bring in the state and strengthen capabilities, while identifying the most effective solutions.
* Please help my Economic Growth & Development students by commenting on unclear analysis, alternative perspectives, better data sources, or maybe just saying something nice :).
Hey Jakob! I enjoyed reading your blogpost. Something that I found interesting about your commentary on energy access in Ethiopia was that this initiative is providing or intends to provide energy through “private sector empowerment”. Do you believe this is a productive way to distribute energy in the context of Ethiopia? It could be that the private sector charges higher prices, engages in corruption activities, and/or is held less accountable by the people (e.g. democratic vote).
Hi Matilda, thanks for your comment. I think that especially in contexts where the state is comparatively weak, mechanisms working through the private sector have some clear advantages over public provision of such goods. Since we are talking about private goods here (SEFFA ensures provision of agricultural energy products), state provision would not actually stimulate the market, but skew supply. On a similar note, corruption is a usually bigger problem in the public sector than in the private sector, since the state has monopoly over the services it provides, whereas businesses are usually driven by economic profit. All this however has to be viewed in light of the challenges a market mechanism entails, which I mention above (most notably inequality).
Hey Jakob! As someone who is also interested and passionate about energy (and the energy transition), I thought your blog post was thought-provoking. One link I’m a bit uncertain about is directly how improved energy access can lead to increasing agriculture. Improving energy use seems like a straightforward way to improve urban livelihoods and services. But, how exactly does this improve agriculture? Better technology and machinery could increase the resulting output and crop yield, but I’m uncertain of to what extent these improvements are reliant on energy access. Following this, I thought your description of the challenges and successes of the effectiveness of improved provisions of energy access was well-rounded (such as through the inclusion of women). I also understand your point about the importance of the State and its involvement, but what about more community-centered energy projects as an intermediary step?
Hello Josephine, thank you for your comment! The project that I have chosen, SEFFA, actually provides not electricity, but energy products (such as solar pumps for instance). These types of products focus on what is called Productive Use of Energy (PUE), which is receiving increasing policy and research attention. Essentially, PUE aims to provide energy (electricity or otherwise) for the sake of directly income- and welfare-generating activities. Since energy in whatever form is crucial for facilitating many economic activities, PUE bridges the gap that you mention in your comment. If you are interested, here is an article talking about PUE, agriculture, and inequalities: https://www.annualreviews.org/doi/full/10.1146/annurev.energy.30.050504.144228?casa_token=27iZYD0YQeAAAAAA:igcINpTMsFGqrfPgGYq2EiM-F0YTAtYTzANUPrAT7EGzyGd70nGdvxogBSZ9mW1LcJM1HehXr88rNw
I think that indeed, community centered approaches, such as micro-grids, could be a good solution. It would definitely address issues of inequality. However, the problem of capacity would probably surface, and it is quite unimaginable for a poorer community to provide the high up-front costs endemic to (especially renewable) energy products without state or private sector support. Therefore, I think community is more important to be integrated in state or private sector programs, rather than providing an “alternative” solution.