In 2016, the United Nations adopted 17 sustainable development goals (SDGs) within the framework of the UN Agenda 2030. The seventh goal “Affordable and Clean Energy” (SDG7) aims to ensure universal access to affordable, reliable and sustainable energy for the world population and to increase the global share of renewable energy and the level of energy efficiency. Enhanced access to electricity for productive uses – and not only the basic needs of private households – is also expected to catalyse an increase in welfare and economic development across all sectors and company sizes and especially in developing and emerging countries, as it constitutes a key element for job creation and increased added value.

The progress towards reaching the goal “Affordable and Clean Energy” (SDG7) is currently monitored based on a Multi-Tier Framework (MTF) for assessing the electricity access conditions on the national level. The present monitoring of the attainment of SDG7, which includes five tiers, mainly places emphasis on the fulfilment of the basic needs for the use of private household applications such as lighting and communication services as well as classic household appliances. However, it does not allow for a systematic and comparable assessment of electricity access conditions for private and productive uses.

New study considers productive use of electricity

In this context, Fraunhofer Institute for Systems and Innovation Research ISI together with the Institute for Resource Efficiency and Energy Strategies GmbH (IREES) conducted a study to review the present monitoring framework and to develop a new approach which also considers the role of productive uses of electricity in developing and emerging economies. By adding to a better understanding of the electricity access needs of a broader range of user types – raging from households to commercial and industrial applications –, the study on behalf of the German Society for International Cooperation (GIZ) further aims to support the implementation of sustainable and needs-oriented energy supply solutions. As the growing productive use of electricity in emerging economies plays a major role for the development of global greenhouse gas emissions, strategic planning of sustainable energy strategies, in line with climate change strategies, is crucial.

An essential recommendation of the study “Next level sustainable energy provision in line with people’s needs” is to fundamentally revise and extend the evaluation levels used so far to monitor the conditions of access to electricity in developing and emerging countries. The “Multi-Tier Framework“ (MTF) should go beyond the basic needs of private households and also consider the framework conditions required to allow for the development of family businesses and small-scale commercial activities. In addition, the authors of the study argue that five additional tiers should be added to the five already existing assessment levels. These should, in particular, cover productive uses, i.e. the requirements regarding the quality and quantity of electricity supply for a broad spectrum of business activities along the value chain.

Dr. Inga Boie, who led the study at Fraunhofer ISI, explains why a holistic assessment framework for electricity access in developing- and emerging economies is so important: “The productive use of electricity covers a broad spectrum of activities, which range from water purification in agriculture, processing of agricultural products, provision of various services or manufacturing of products to large-scale industrial production. However, especially in developing and emerging economies, there is no clear separation between private and productive use of electricity, as small family-run businesses and the informal sector play a major role. Therefore, in order to be able to meet the growing electricity demand in these countries with needs-oriented and sustainable energy strategies, it is crucial to have a monitoring framework which systematically considers the requirements of private and productive users of electricity.“

Holistic picture for the evaluation of electricity access conditions

The inclusion of a broad range of potential economic activities on the basis of energy intensity and common process technologies of the most important industrial sectors creates a holistic picture for the evaluation of electricity access conditions. Thereby, not only the status quo of economic activities in emerging and developing countries is taken into account, but also the requirements of potential future industries and orientation towards world market standards are considered. The study further provides an important basis for collecting comprehensive data at country level for the respective evaluation stages in the future. This, in turn, could facilitate and improve the coordination of economic development in developing and emerging economies and national strategies to combat climate change.