1. 1a1a The Magnitude of the ENERGY ACCESS Problem: How many are unserved? How much would service cost?

2. This presentation in context The following analysis is based on entirely on assumptions, some of them well-founded. Though we are confident in the general conclusions and the order of magnitude of all results, if for any reason you should like to repeat the exercise using different numbers, feel free to use this spreadsheet as a template: Magnitude of the Energy Access Problem

3. 2 Billion is the number, Now what is the question? There are several compelling reasons to use 2 billion as the number of people un- and under-served by modern energy services. –Fairly credible data indicate 2.4 B using biomass to meet their cooking needs (G8 task force, 2001, annex, p. 24). –Less than credible data indicate 1.5 B people living in un-electrified homes. Adjusting for the gross misreporting of China (claiming only 8.5 M un-electrified), this easily reaches 2 billion. –2.6 B are said to live on $2 a day or less.

4. 2 Billion is the number, Now what is the question? Furthermore, this estimate of 2 billion un- and under-served is not projected to change significantly over the next 20 years (!) according to the IEA WEO (2008). –Population growth and decreasing household size eat away at gains in service provision. –Grid connections become increasingly difficult in rural, peri-urban and slum environments.

5. What is required? How many households is that? Assuming there are 2 billion un- and under- served and there are 4-5 people on average per household, this translates into approximately. 400-500 million households

6. What is required for each household? Each household’s BASIC ENERGY REQUIREMENT is comprised of –Light, several hours per day –power points (or equivalent) supplying electricity, for example, to charge a cell phone or power a radio. –and reduced smoke, more efficient biomass cooking capable of meeting the household’s nutritional requirements

7. What is required for each household? Let’s consider two different packages: –If biomass resources – cow dung, chicken litter etc. – are available, then a $250-$300 biogas digester can supply lighting and cooking. Electric power would need to come from small solar PV or batteries. –Alternatively, basic electricity and lighting could come from a solar PV system combined with an efficient biomass stove. This would cost approximately $300. Whether $300 / HH is the “right” number, is it a reasonable proxy? Let’s use it and see what happens.

8. What is required at the community level? In addition to households, communities of ~100 houses need potable water and some electricity and lighting for education, health services and meetings. One estimate, from the G8 Task Force (2001), pegged this need at 5 kWh/day. 5 kWh / 5 hrs. daily operation  1000 W * $7 / Wp = $7,000 / 100 HH (or $3,500 at each of two locations, one school/community center and one clinic)

9. How much does it cost? (HH + Communities) Combining these two budgets, $300 / HH and $7,000 / community of 100 HH, then a $37,000 budget will serve between 400 and 500 people at a one-time cost of $74-$93 per person

10. How much does it cost all together? Putting 4 people in each household, and spending $300/HH and $7,000 for every 100 HH, the final total comes to $185 billion Basic Assumptions $300/HH (5 people) $7000/community (100 HH) $74-$93/person $185 B for everybody

11. How much does it cost all together? $185 billion These resources could come from… –Household budgets existing energy expenditures, fuel savings, improved income, etc. –National and local government budgets for health, education and sanitation –Outside donor support

12. How much does it cost over time? Now suppose that IDA-type funds could be applied to decentralized electrification and cooking in the developing world. The cost could be amortized over 30 years at 2% interest. That would translate to $1.46 / HH / mo. or $17.54 / HH / yr. Basic Assumptions $300/HH (4-5 people) $7000/community (100 HH) $74-$93/person $185 B for everybody

13. How does this cost compare to others? $185 billion represents modern energy services for 2 billion people (for 10+ years) and: –2.9% of the total developing country electricity improvements estimated in the WEO (2006). –4.3% of the worldwide electricity bill over ten years’ time.

14. SME Potential CASE 1 Installations/yr/enterprise: 5,000 Enterprises needed: 10,000 CASE 2 Installations/yr/enterprise: 10,000 Enterprises needed: 5,000 Target: reach 100% of 500M HH over 10 years: 50 M HH/yr

15. SME Potential CASE 1 Installations/yr/enterprise: 5,000 Enterprises needed: 10,000 Initial Capitalization: $130,000 Total Capital Required: $1.3 B CASE 2 Installations/yr/enterprise: 10,000 Enterprises needed: 5,000 Initial Capitalization: $130,000 Total Capital Required: $650 M Target: reach 100% of 500M HH over 10 years: 50 M HH/yr

16. SME Potential CASE 1 Installations/yr/enterprise: 5,000 Enterprises needed: 10,000 Initial Capitalization: $130,000 Total Capital Required: $1.3 B Initial Subsidy: 15% Total Subsidy Required: $200 M CASE 2 Installations/yr/enterprise: 10,000 Enterprises needed: 5,000 Initial Capitalization: $130,000 Total Capital Required: $650 M Initial Subsidy: 15% Total Subsidy Required: $100 M Target: reach 100% of 500M HH over 10 years: 50 M HH/yr

17. SME Potential CASE 1 Total Capital Required: $1.3 B Total Subsidy Required: $200 M (15%) Capital Recovered: (P+I @ 7% net of losses) $1.1 B CASE 2 Total Capital Required: $650 M Total Subsidy Required: $100 M (15%) Capital Recovered: (P+I @ 7% net of losses) $550 M Target: reach 100% of 500M HH over 10 years: 50 M HH/yr

18. SME Potential CASE 1 SME Capital (recovered): $1,100,000,000 + SME Subsidy: $200,000,000 = $1,300,000,000 + Program Capital: $185,000,000,000 = $186,300,000,000 SME Subsidy as % of Total: 0.107% SME Subsidy per HH: $0.40 CASE 2 SME Capital (recovered): $550,000,000 + SME Subsidy: $100,000,000 = $650,000,000 + Program Capital: $185,000,000,000 = $185,650,000,000 SME Subsidy as % of Total: 0.054% SME Subsidy per HH: $0.20