Energy poverty: A key barrier to achieving sustainable development goals

The United Nations has framed 17 Sustainable Development Goals (SDG) as part of the 2030 agenda for Sustainable Development adopted by all United Nations Member States in 2015. It includes a dedicated goal on Affordable and Clean Energy under the SDG 7 aiming to ensure access to affordable, reliable, sustainable and modern energy for all. The core part of achieving this goal is tackling energy poverty. Energy poverty refers to the lack of access to adequate, reliable, affordable, and clean energy services for basic human needs such as lighting, cooking, heating, cooling, communication, and operating essential appliances and technology and other daily activities necessary for family and community welfare and, economic development. It affects a significant portion of the global population, particularly in developing countries and vulnerable households in developed nations. 

Why care about energy services?

Energy poverty takes different forms in different parts of the world:

There is no one particular definition for energy poverty and its context generally varies for developing and developed nations (Blanka et al, 2021): while access to energy is an important issue in developing countries, the affordability of energy and its consequences in terms of restrictions in energy services are a central topic in developed countries. Energy poverty itself also takes on different forms around the world, and its consequences - for example on peoples’ health - vary depending on the context. The different conceptions of energy poverty have been examined and studied by Bouzarovski and Petrova (2015).

In the “developing world”, energy poverty is mainly driven by problems of access to certain energy sources and by low levels of electrification. Energy poverty here also takes the form of a lack of access to adequate facilities for cooking, lighting and electric appliances and to services such as space cooling and heating. Its main consequences are detrimental impacts on health, gender equality, education and economic development. In terms of policy, it can be addressed through support for transitions to modern energy fuels, investment in power grid expansion or micro-scale renewables and income support. Examples of energy poverty include a family in a rural area relying on firewood for cooking, a student in a rural area with no electricity struggling to study after dark, a person unable to pay their utility bill.

A family in a rural area relying on firewood for cooking | The University of Queensland

A student in a rural area with no electricity struggling to study after dark | FINCA

In the “developed world”, the driving force behind energy poverty is high, set against a backdrop of low household incomes, inefficient building envelopes, heating systems and appliances. In cold countries, energy poverty generally corresponds to inadequate heating in the home, resulting in long and short-term mental and physical health issues and inadequate participation in society. Policies to alleviate energy poverty revolve around a combination of income support, provision of energy at lower costs, and energy efficiency investments. Examples of energy poverty include a person unable to pay their utility bill, a person unable to afford to heat their home in winter, elderly people in poorly insulated homes struggling to afford heating during winter, leading to restrictions on other necessities such as food or health expenses, and higher rates of winter illness and mortality.

Chan and Delina (2023) discuss the stark contrast in the perception of energy poverty between Asia and other world regions, particularly in the Global North. For instance, energy poverty in the Global South is often perceived solely as a problem of limited access to clean fuels for cooking. In contrast, in the Global North, energy poverty  is viewed as primarily arising  from the inability to keep homes adequately warm. 

Causes of Energy Poverty:

The causes of energy poverty include several interconnecting factors, some of which are listed in the table below.

The different types of causes of energy poverty

Causes at the individual level

• Low income households struggle with poverty and poverty directly limits a household's ability to pay for energy services. 
• Use of outdated power consuming appliances for lighting and heating/cooling systems.
• Use of polluting energy sources such as wood or coal for cooking, from force of habit rather than necessity
• Inefficient housing insulation, requiring more energy for heating and cooling, contributes to energy losses resulting in higher energy bills. 

Causes related to the energy system

• The ever rising cost of fuel and electricity makes energy unaffordable for an increasing number of  households. 
• Lack of infrastructure (power grids, gas pipelines), especially in remote and rural areas, limiting access to modern energy. 
• The high electrical losses incurred in transmission and distribution networks (T&D loss) due to inefficient and outdated equipment result in increased electricity tariff which indirectly causes energy poverty. 
• In urban areas, unstable and unreliable power supply with frequent power fluctuations and outages cause disruption in energy services which is damaging for household consumers and for people who run small businesses. 

Larger causal factors

• Inflation, and increasing costs of living  which increase social inequalities and reduce people’s ability to afford clean energy.
• Economies that rely heavily on fossil fuels are vulnerable to price volatility and energy insecurity. 
• Geopolitical conflicts can cause instability and disrupt energy supplies driving up prices. 
• To further worsen matters, due to climate change, extreme weather events can damage energy infrastructure and increase the requirement for heating and cooling, further straining resources. 

The factors contributing to energy poverty create vicious circles  where poverty, inequality, and limited energy access reinforce each other. 

Consequences of Energy poverty:

The consequences of energy poverty are far-reaching and severely impact human well-being and development. 

Consequences of burning solid fuels

Major health impacts

• Burning solid fuels for cooking and heating leads to air pollution which causes respiratory diseases, accidents and deaths annually, particularly among women and children. 

Women are particularly at risk

• Women and girls often bear the brunt of fuel collection, which limits their time and opportunities to perform other tasks.
• Women are generally responsible for cooking meals, which exposes them to indoor air pollution, ultimately leading to respiratory diseases. 

Environmental impact

• Further, reliance on solid fuel which is generally wood, contributes to deforestation and land degradation and burning them contributes to greenhouse gas emissions. 

Consequences of unaffordability of energy

Unaffordability can cause health problems

• Stress, anxiety, and depression can arise from the inability to afford basic energy needs and maintain a comfortable living environment. 
• Unaffordability of energy often results in people limiting their consumption of other necessities such as food or health services, resulting in various health problems.
• Inability to afford adequate heating or cooling leads to thermal discomfort which disrupts sleep patterns and can cause fatigue, weakened immune function, increased risk of cardiovascular problems, and impaired cognitive performance. 

The consequences of insufficient lighting

• In remote areas, the lack of electricity limits study time, preventing children from studying after dark. 
• Lack of proper lighting also increases the risk of accidents and crime. 
   

Other effects of unaffordability

• Households unable to pay their electricity bills might be disconnected by their energy supplier, resulting in an inability to use electricity and its replacement by other, potentially dangerous energy sources.
• Households spending a large portion of their income on energy hinders their ability to escape poverty. 

Possible solutions:

Energy poverty is deeply interconnected with broader global development efforts. To address this complex issue, a multidirectional approach is required. Solutions involve a combination of policies aimed at increasing and expanding access to affordable and clean energy, improving energy efficiency, and addressing the underlying causes of poverty. Some of the key aspects to alleviating energy poverty are described  below: 

Solutions to eliminating energy poverty 

Solutions to energy poverty would include the following actions:

1. Expanding access to electricity networks
   • Invest in and expand electricity grids, especially to reach rural and remote areas.   
2. Promoting decentralised renewable energy systems 
   • Promote off-grid solutions like solar home systems, mini-grids powered by renewables, and clean cooking technologies for areas where grid access is challenging.
3. Promoting clean cooking solutions 
   • Facilitate the adoption of clean cooking fuels such as LPG, biogas, electric stoves and improved cooking stoves to replace the use of harmful solid fuels.
4. Increasing energy affordability in low income households 
   • Implement targeted subsidies
   • Social tariffs
   • Direct financial support to help low-income households pay their energy bills.
5. Minimum energy performance standards for buildings and appliances 
   • Implement and enforce standards for energy-efficient appliances 
   • Implement minimum energy performance standards for buildings.
6. Building retrofits and insulation for improving energy efficiency 
   • Develop programs that help low-income households improve the energy efficiency of their homes through insulation of roofs and walls, and efficient windows and doors. 
   • Develop cooling/heating solutions at the individual or collective level to facilitate access to cooling/heating. This is particularly important to  prevent overheating or overcooling of homes in a changing climate.
7. Investing in innovation of affordable and clean energy technologies 
   • Support innovation in affordable and clean energy technologies suitable for off-grid and low-income settings. 
8. Policy and Regulatory Frameworks 
   • Develop comprehensive national strategies with clear targets and indicators for reducing energy poverty.

It is possible to make significant progress in addressing this issue by implementing a combination of strategies given above, customised to specific local contexts. For instance, in developed nations, uninterrupted access to electricity and clean cooking is less of an issue, and standards for buildings and appliances are well developed. However, retrofitting energy inefficient dwellings remains a significant challenge. In developing nations, continuous access to electricity, clean cooking and standards are quite important solutions that could be implemented to alleviate energy poverty. Ultimately, tackling energy poverty requires a context-sensitive approach and recognizing that solutions must be tailored to the social, economic, and infrastructural conditions of each region.

To conclude:

Solutions to energy poverty should be considered at different levels.

At the individual level, people may not be aware that they experience energy poverty. Understanding its causes and consequences is the first step towards creating lasting change. With the demystification of the concept of energy poverty, consumers might start looking for solutions to solving the problem and protecting themselves from the ill effects of it. Some consumers take energy access for granted, but for many around the world, access to affordable and quality energy services is a daily struggle. 

At a collective level, being more aware of our energy use, supporting clean energy initiatives, and advocating for fair energy policies, could play a role in helping bridge the energy gap.

At a macro-level, since energy is foundational, energy poverty has a ripple effect that impacts other SDGs too. Addressing energy poverty is crucial for achieving not only SDG 7 but also supporting other SDGs like education, health, gender equality, poverty reduction and climate change. Therefore, addressing it would require a holistic approach that tackles the underlying social, economic, and environmental factors that contribute to a lack of adequate and affordable energy services.

Acknowledgement:

The author thanks Dr. Ute Dubois, Associate Professor, ISG Business School, Paris, for her valuable insights and feedback during the preparation of this article.