How to end energy poverty and reach net-zero emissions

In 2012, former UN Secretary-General Ban Ki-Moon famously referred to energy as the “golden thread connecting economic growth, social equity and environmental sustainability”. This was an apt recognition of how access to energy is critical for productive activity and access to ‘clean’ energy is critical for positive health and climate outcomes.

Unfortunately, nine years on, the world continues to lag behind on its biggest goal for the energy sector resulting in energy poverty. Progress on Sustainable Development Goal 7 (SDG7) is nowhere near what is required to meet its 2030 target. More than 750 million people have no access to electricity and 2.6 billion people continue to lack access to clean cooking technologies. At the current pace, these numbers will remain above 600 million and 2 billion people respectively in 2030.

Global renewable energy adoption – the second indicator of SDG7 – remains low despite commendable progress. There’s also much room for improvement on energy efficiency – the third and final indicator. As it stands, only 10% of global energy consumption comes from modern renewable energy sources, while the global annual rate of energy efficiency improvement hovers around the 1% mark versus a 3% target resulting in energy poverty worldwide.

Recognizing the importance of tackling this energy challenge, the UN General Assembly has called for an unprecedented Summit on Energy for the first time in 40 years. The UN High-Level Dialogue on Energy will be convened by UN Secretary-General António Guterres in September 2021. The last such gathering in 1981 was in the wake of the oil crisis.

As we prepare for this upcoming summit, the deeply entrenched nature of the current energy poverty cannot be overlooked. It is not enough to think of energy merely as a lever in the fight against climate change, but one that is critical to recovering better, restoring economic activity and progress and empowering millions to break free of the shackles of poverty and poor health as well as climate change.

Stakeholders across the public, private and civil sectors are signing up to energy compacts that contain voluntary commitments and specific actions towards achieving success by 2030. As we begin expediting progress towards SDG7, it is critical to keep equity, justice and inclusiveness at the heart of the energy transition. Energy for development and ending energy poverty will be central to any pathway to net-zero emissions.

Some staggering figures highlight the massive regional inequalities as many people remain energy poor. Excluding South Africa, the remaining 1 billion people in 48 Sub-Saharan African countries are serviced by a power generating capacity of just 81 gigawatts. For comparison, this is roughly the same as the installed capacity in Germany which services about 83 million people. It is important to pay attention to these metrics as evidence suggests a strong correlation between electric power consumption per capita and gross national income per capita. As such, the aim of leaving no one behind and eradicating global poverty must be preceded by intentional efforts to end energy poverty.

Amidst global efforts to spur an economic recovery from the COVID-19 pandemic, we now have a once-in-a-lifetime opportunity to recover better with sustainable energy for all. There are opportunities to reset economies and adjust structures of development and competitiveness by:

(i) rolling out economic stimulus measures and social safety net programmes;

(ii) investing in new technologies, businesses, and systems;

and (iii) rethinking the structure of post-COVID economies and societies.

Government capital will be prioritized for recovery packages but a more powerful impact might entail combining sustainable energy with development priorities that alert the private sector to the opportunities in the emerging sustainable energy sector. It is crucial to involve the private sector to deploy capital at the scale required to end energy poverty and achieve SDG7.

SEforALL’s Energizing Finance series published in 2020 reports that $41 billion is needed annually till 2030 to achieve universal residential electrification, but only a third of this – just $16 billion in finance commitments were tracked in 2018. Another $4.5 billion is needed to achieve universal access to clean cooking, yet a mere $131 million went towards clean cooking solutions in 2018.

These huge financing gaps represent a major opportunity for the private sector to step in, deploy capital at scale and hasten progress towards achieving SDG7 and ending energy poverty for all. A monumental effort such as this will require stakeholders to work together in creating a system of evidence-based projects and blended finance, taking advantage of economies of scale within and across countries.

The climate change challenge is an energy transition challenge with three-quarters of global greenhouse gas emissions coming from the energy sector. In addition, bringing an end to energy poverty is a critical piece in expediting this global energy transition. This means accounting for diverse economic and energy realities and accommodating various pathways to our shared common goal of net-zero by 2050. The International Energy Agency’s (IEA) recent report, Net Zero by 2050: A Roadmap for the Global Energy Sector, highlights how reductions in emissions must go hand‐in‐hand with efforts to ensure energy access for all by 2030.

It is now time for the global audience to raise its ambitions by developing innovative models and deploying finance at scale to end energy poverty and achieve SDG7 by 2030 and secure a net-zero future by 2050.