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Understanding the Scale of Investment for Universal Energy Access

Authors: Morgan Bazilian, United Nations Industrial Development Organization, Patrick Nussbaumer, United Nations Industrial Development Organization, Erik Haites, Margaree Consultants Inc., Michael A. Levi, David M. Rubenstein Senior Fellow for Energy and the Environment and Director of the Maurice R. Greenberg Center for Geoeconomic Studies, Mark Howells, International Energy Agency; KTH Royal Swedish Institute of Technology, and Kandeh K. Yumkella, United Nations Industrial Development Organization
Volume 32, Issue 10 and 11, October-November 2010
Geopolitics of Energy

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Abstract

Significantly increasing access to modern energy services in developing countries requires strong and immediate action. Energy access is crucial to enhance economic and social development, reduce poverty, and contribute to international security. To help provide clarity in this area, support political decision making, and inform the design of financial responses, we consider the overall scale of spending required to meet universal access to modern energy services. We review the existing literature at the global, regional, national, and project levels and disaggregate cost estimates in order to provide increased transparency through comparable metrics. We then describe a new methodology and calculate three new cost scenarios that attempt to address several existing analytical gaps. We conclude that the total cost of providing (near) universal access is likely to be considerably higher than published estimates which often focus primarily on capital costs. While recognizing the coarse nature of our analysis, we find that the annual cost of universal access to electricity and clean cooking ranges from USD 14 to 136 (USD 12-134 billion for electrification and USD 1.4 to 2.2 billion for clean cooking).

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