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FUEL POVERTY : a new challenge for the 21st century

par Malia Belkacem

mardi 17 juillet 2012 - Mis à jour le mercredi 23 janvier 2013

According to the International Energy Agency, due to the demographic growth, energy demand is expected to increase by 50% between now and 2030. Access to energy is fundamental to improving quality of life and is a key imperative for socio-economic development.

A GLOBAL CURSE

After hunger, fuel poverty is now a global curse. « Energy is one of the areas that shows most clearly the gap between the global rich and the global poor, and the social and economical inequities that result ». According to the International Energy Agency, with the demographic growth, energy demand is expected to increase by 50% between now and 2030. Access to energy is fundamental to improving quality of life and is a key imperative for socio-economic development. Today, more than 6 billion people are living on our planet and still in the 21st century :
- 2 billion people do not have access to energy and other basic services
- 3 billion people are living with less than 2 dollars a day in emerging countries. Access to basic needs in these conditions is complicated. The traditional heating systems that are used impact the health, education and safety of the population.
- 1,5 million people die each year from indoor air pollution.
- Women and children spend hours gathering firewood which causes deforestation and increasing CO2 emissions.

FUEL POVERTY IS NOT JUST ABOUT ACCESS TO HEATING

The definition of fuel is taken to include all expenditure on domestic energy, including that used for hot water, cooling, lights and appliances. It is directly linked to the capacity of people to afford an energy service and pay their bills.

Fuel Poverty is caused by a convergence of various factors :
- Low income, which is often linked to absolute poverty
- High fuel prices, including the use of relatively expensive fuel sources
- Poor energy efficiency of a home, eg. through low levels of insulation and old or inefficient heating systems.

Fuel poverty concerns rural and urban areas. As an example, while the majority of un-electrified population live in rural areas, urban energy poverty persists, especially in South Asia where 30% of the urban population does not have electricity.

REDUCING BIOMASS AS A COOKING FUEL

The UN Millennium Project target is to reduce by 50% number of households relying on biomass as a primary cooking fuel by 2015. In Asia around 900 million people need to gain access to modern fuels by 2015. To achieve universal access by 2030 more than 1,9 billion people would need access to cleaner, safer, more reliable fuels. According to the World Health Organisation, a 50% reduction in the number of households using biomass as primary cooking fuels would achieve benefits to society of nearly 91 billion USD.

Fuel poverty has become, after hunger, a worldwide curse. It concerns both northern and southern countries. Tailor-made solutions for each situation should be found. As a consequence of the present financial crisis, fuel poverty is now also impacting the northern countries. This poverty cannot be compared to poverty in emerging countries but still the results are dramatic on families’ situations. It will impact directly the health of the inhabitants, their energy consumption, water use and waste production and finally their well being.

FUEL POVERTY IS A STRATEGIC ISSUE

Fuel poverty is a strategic issue for the next decade, which will push companies – private and public – to rethink their business models and imagine new solutions adapted to this targeted population. A real BoP (Bottom of the Pyramid) [1] approach linked to energy access should be explored by all energy actors. Energy companies should consider the people who do not have access to affordable energy as potential future clients of a more innovative energy solution. All parties would benefit from new solutions to the problem of energy affordability. It is a common responsibility to develop innovative solutions and encourage public private partnerships and multistakeholders cooperation against fuel poverty.

Some actors are, today, actively working on fuel poverty and energy access, among which international financial institutions. At the national level, some governments are taking initiatives to work on fuel poverty issues, such as South Africa and Morocco. At the regional level, initiatives are also taken, e.g. "Energy Poverty Action", "Energy for all in Asia". In the Mediterranean region, the "Observatoire Méditerranéen de l’Energie" (OME) considers the energy access issue as strategic for Sustainable Development of the Mediterranean region.

At the local level various initiatives are developed to help provide solutions : projects adapted to low income populations (BoP) are developed by microcompanies in the energy sector. Research and development groups seek innovative solutions to ease the access to energy, in partnership with NGOs and local associations (solar energy…), following a multidisciplinary approach mixing economic, social and financial issues. All initiatives aiming at reducing fuel poverty will contribute positively to solve this new real challenge for the 21st century.

Malia Belkacem is a Senior Strategy and CSR Programme Director at GDF Suez in Paris.

P.-S.

Thanks to Erin Bouayad for her excellent and accurate reading ;

PHOTO : Abdelaziz LAWANI (voir http://www.memoireonline.com/01/09/1921/m_Contribution-du-Bois-Energie-aux-moyens-dexistence-durables-des-menages-riverains-de-la-Reserve-de0.html)

Notes :

[1] See Professor C. K. Prahalad, The Fortune at the Bottom of the Pyramid - http://www.socialfunds.com/news/article.cgi/1571.html