Electricity access for low-income households: good policy intentions, bad trade-offs and unintended consequences
A new report on electricity access for low-income households by Tracy Ledger, Lead Researcher on the Energy and Society programme.
Poverty has received scant attention from an energy perspective. This is remarkable given that energy is central to the satisfaction of basic nutrition and health needs, and that energy services constitute a sizeable share of total household expenditure in developing countries.
This working paper focuses on how the affordable energy access goals of South Africa’s energy policy have been undermined: our analysis indicates that this is the result of a combination of poor system governance, the failure to allocate clear accountability for delivering affordable access, haphazard institutional alignment and an overarching failure to identify and address critical competing policy tradeoffs, particularly between affordable energy access for households and municipal financial viability.
Many of these negative outcomes originate in the local government sphere of the state — in the structure of its revenue model, in the priorities emphasised by national departments with key oversight roles over municipalities, and in the central gatekeeper role that local municipalities play in determining who gets access to subsidised services and who does not. Certainly, there are multiple weaknesses in the overarching policies that local government is responsible for implementing (which weaknesses need to be addressed), but the manner in which these have been implemented by local government has made a bad situation even worse.
The current operation of the energy distribution system is actively and significantly contributing to increased poverty and inequality, as is detailed in this working paper. Key oversight institutions are effectively reproducing and entrenching these outcomes, either by neglecting their mandated oversight roles in respect of energy access, or by emphasising competing outcomes inherently at odds with a pro-poor energy agenda.
This situation is completely contrary to the intentions of both South Africa’s pro-poor transformation agenda (including the central role of local government in delivering that agenda) and original policy intentions concerning the developmental role of energy in a post-apartheid society. These outcomes also have the potential to undermine the decarbonisation goals being pursued in the transition from coal to clean energy. Effectively, by ignoring the details of what is actually going on in our energy distribution system, we are building and entrenching two parallel energy systems: a visible, clean system based on renewable energy generation to which access is effectively limited, alongside a largely invisible, dirty and dangerous system that is the only option for millions of households.
Most of these negative outcomes reflect a failure of national policy coordination, coherence and alignment, and the siloed nature of the state (where national departments focus only on their own narrow mandate and largely ignore crosscutting developmental objectives), rather than any specific malicious intent on the part of the state. However, this is meagre comfort to the millions of South Africans who have effectively been denied the access to affordable and safe energy promised to them more than twenty years ago.