Dr. Rosy Pradhan Shrestha,
Energy, a fundamental driver of human progress, has shaped the course of history and civilization since time immemorial. From the discovery of fire to the electrification of cities, energy has been pivotal in shaping human development. Although energy is an indispensable resource for social development and daily life and despite its crucial role, millions around the world continue to grapple with the harsh realities of energy poverty. As per UNDP, energy poverty is defined as “inability to cook with modern cooking fuels and the lack of a bare minimum of electric lighting to read or for other household and productive activities after sunset”. As per this definition, 3 billion people worldwide, who use biomass for cooking and 1.1 billion people with no access to electricity are characterized as “energy poor”.
The absence of adequate modern sources of energy impedes the presence of decent living conditions and the days seem shorter for them due to absence of electricity after sunset. Energy poverty has no common definition. Access to modern energy services, consumption levels, and affordability are the main criteria for defining energy poverty in the literature. One definition of energy poverty that covers multiple aspects as “the absence of sufficient choice in accessing adequate, affordable, reliable, high-quality, safe and environmentally benign energy services to support economic and human development”.
As with fuel poverty, this is a global issue which stems from the simultaneous increase in energy prices and reduction in household purchasing power and it affects both wealthy and poor nations. This issue arises when a significant portion of income is spent on energy bills, often due to low income, high energy prices, and inefficient housing. The term “fuel poverty” emerged in the United Kingdom in the early 1990s and especially used for European countries whereas “energy poverty” is broader term, used in almost all part of the world. As such, the problem of inadequate access to modern types of energy (e.g., electricity) is usually the central issue in the context of developing countries. Energy poverty is typically divided into two categories: availability and affordability. In developed countries, the focus is on various issues preventing people from obtaining an adequate level of domestic energy services, specifically affordability. Hence, energy poverty, a multi-dimensional global issue, transcends geographical boundaries and socio-economic divides, affecting individuals and communities across the globe.
Measuring Energy Poverty: A Diverse Landscape
Quantifying energy poverty poses a formidable challenge due to its multifaceted nature. Various approaches have been employed, ranging from income-expenditure assessments to subjective self-assessments by households. There are different approaches to measuring energy poverty. Measuring energy poverty involves various approaches that capture its multifaceted nature, combining economic, social, and technical dimensions. The most applied measure of energy poverty is the Income-expenditure approach; also known as the Economic threshold. As per this approach, which is based on income and energy-related household expenditures, energy-poor households spend more on energy. An example of the Economic threshold can be found in the UK fuel poverty official statistics, where households spending more than the 10% mark are considered energy poor. A household with a residual income (after subtracting energy expenditures) that is lower than 60% of the median income and whose energy expenditure exceeds the median expenditure is classified as energy poor, according to the Low income-high cost approach.
Technology threshold approach is based on the energy poverty definition, which states that not all people have access to modern energy services such as electricity. The number of people without access to modern energy services is measured by counting the number of people without access to modern energy services. This approach is generally adopted in developing countries however, it does not capture the affordability dimension of energy poverty. Some households have access to energy but are not able to afford it. It also does not consider the degree of energy insecurity, which is a very common scenario in developing countries.
The Physical threshold approach measures energy poverty through the minimum energy consumption associated with basic necessities. Any household below the minimum threshold is categorized as energy poor, but the number of people categorized as energy poor is sensitive to the choice of threshold, and the definition of basic necessities. Subjective measures rely on households’ self-reported difficulties in affording energy. It measures use households’ feelings and perceptions of their energy use. Among the subjective measures in the energy poverty literature, the most commonly used is households’ self-assessment of their inability to afford adequate heating for their homes. These measures are popular because they capture the lived experience and the feeling of energy deprivation.
Technical and access-based approaches, such as the Multidimensional Energy Poverty Index (MEPI) and Energy Access Index (EAI), evaluate aspects like access to modern energy services and appliances. Multidimensional frameworks, incorporating indicators beyond income, shed light on the broader socio-economic context in which energy poverty unfolds. This measures use a set of different indicators to capture multiple dimensions of energy poverty. These diverse approaches ensure a thorough understanding of energy poverty across different contexts and dimensions. Together with the above measures, energy insecurity should be accounted for, in relation to energy poverty, and included where possible.
Energy poverty in context of Nepal
Nepal has made commendable progress in expanding electricity access. Approximately 95% of the population had access to electricity. However, while the effort is laudable, access alone does not equate to energy security and they are not sufficient to fully eradicate energy and fuel poverty in Nepal. The issues of energy poverty and fuel poverty remain pervasive issues in Nepal, undermining development and affecting millions of lives across the country, sometime even unnoticed by the concerned authorities. As the government and various stakeholders work towards addressing these challenges, the complexities of Nepal’s energy landscape reveal that much more needs to be done. Many rural areas, where the majority of Nepal’s population resides, suffer from unreliable and inconsistent electricity supply.
Frequent power outages and voltage fluctuations are common, hampering daily life and economic activities. Energy poverty and fuel poverty are critical issues in Nepal, affecting a significant portion of the population and impacting their quality of life, economic opportunities, and health outcomes. Given that, nearly 70.60% of the population of Nepal do not have access to clean cooking whereas globally 2.3 billion people has not access to clean cooking. A significant portion of the population, especially in rural areas, still relies on traditional biomass (wood, crop residue, animal dung) for cooking.
This poses health risks due to indoor air pollution and contributes to deforestation. Besides, lack of clean cooking, people residing in the mountainous area of Nepal is suffering from energy poverty due to lack of adequate warmth in their home. Energy poverty has profound and multifaceted effects on mountainous people, impacting their health, education, economic opportunities, and overall quality of life. The harsh climatic conditions in mountainous regions exacerbate the challenges posed by energy poverty. Generally, they adapt to this adverse condition by moving to the warmer area or lower altitude area, so that they can cope with the winter season. At its core, energy poverty signifies more than just the absence of electricity or clean cooking fuel.
Nepal experience energy poverty in four key dimensions; access to electricity, clean energy for cooking, affordable energy, and reliability. Rural communities, often marginalized and underserved, bear the brunt of energy poverty’s impact. For women in these communities, energy poverty exacerbates existing socio-economic disparities, perpetuating cycles of poverty and inequality. As Nepal continues its journey towards energy security, the stories of those still living in energy and fuel poverty highlight the urgent need for comprehensive solutions. Addressing these challenges will not only improve quality of life but also foster economic development and environmental sustainability, ensuring a brighter future for all Nepalese.
