The national governments are uniquely positioned to target and support disadvantaged populations most in need of energy services by providing safety nets for those living in energy poverty, said the new research report from SEforALL.
This report titled ‘Energy Safety Nets’ was released jointly by Sustainable Energy for All (SEforALL), the Overseas Development Institute (ODI), and the Catholic Agency for Overseas Development (CAFOD).
Further, Energy Safety Nets refers to government-led approaches to support the very poor and vulnerable to access essential modern energy services across both electricity and clean fuels and technology for cooking – 2 critical elements of Sustainable Development Goal 7 (SDG7) which calls for sustainable energy for all by 2030.
Commenting on the report, Damilola Ogunbiyi, CEO and Special Representative of the UN Secretary-General for SEforALL and Co-Chair of UN-Energy said “to achieve universal energy access, we must close the affordability gap and put the poor first. Public finance and governments play a key role in bridging this gap to connect poor and vulnerable populations to modern energy services they can afford.”
“Governments can use this research to inform and design effective Energy Safety Nets – helping to improve both people’s welfare and further progress on SDG7,” Ogunbiyi added.
The report examines existing approaches in six countries i.e. India, Brazil, Ghana, Mexico, Kenya, and Indonesia to identify lessons learned and pitfalls to avoid for the sake of informing future development of Energy Safety Nets.
It further stated that many countries across the world have implemented the Energy Safety Nets in different forms. They close the affordability gap between market prices and what poor consumers can pay for both connections and service delivery tariffs, ensuring that households or social groups are not left behind in progress to meet SDGs.
The report revealed 5 key takeaways for policymakers to consider when designing their own energy-focused social assistance mechanisms:
1). Connections and consumption: Household connections to a local mini-grid or LPG system, for example, do little good if an individual cannot afford the energy they provide over the long run.
2). Targeting mechanisms: The type of subsidy delivered and the mechanism for delivering it will impact an initiative’s effectiveness.
3). Data improves targeting: A lack of evidence on the energy consumption levels within vulnerable households prevents policymakers from determining appropriate thresholds for subsidies.
4). Flexibility needed: Energy Safety Nets should be appropriate to the country’s institutional, geographic, economic and social context, including efforts to promote gender equality.
5). Political commitment: The success of Energy Safety Nets depends on strong, multi-year political commitment.