Energy and Economic Growth (EEG) has announced its first three research projects, out of 20 expected to start this year. Funded by the UK’s Department for International Development (DFID), EEG produces cutting-edge research on the links between energy and economic growth in low-income countries. The projects aim to fill knowledge gaps that will help bring the benefits of modern energy services to poorer people.

EEG works closely with policy makers in Sub-Saharan Africa and South Asia to produce research that aims to galvanise investment in more sustainable, efficient, reliable and fair energy systems. The new projects focus on one or more of EEG’s four main research areas; efficient and productive use, reliability, renewable energy and grid access.

Energy systems planning for SDGs

While the consensus is that energy planning is central to the optimisation of investments in energy production and infrastructure, within Sub-Saharan Africa and South Asia it is constrained by insufficient human and institutional capacity to effectively use models and decision supporting tools for energy planning and management. EEG’s new project, led by the Royal Institute of Technology (KTH) in Sweden, supports the achievement of Sustainable Development Goal 7 by addressing capacity and data gaps through the delivery of energy modelling training across targeted institutions in Ethiopia, Uganda and Sierra Leone.

Micro-finance for electricity in Rwanda

Hundreds of millions of families in low-income countries live without power because they cannot afford the upfront costs of securing an electricity connection. If they do become connected, upfront costs prevent many low-income families and small businesses from purchasing life-changing and income-generating appliances such as televisions, refrigerators, computers, irrigation pumps, grain mills and electric cookers, even though many of these appliances could generate income and pay for themselves in the long-term. EEG’s new project in Rwanda will explore whether micro-loans can help spread these upfront costs over time, led by the Leibniz Institute for Economic Research (RWI), based in Germany. Randomly assigned communities recently connected to the electricity grid will be provided with access to tailored micro-credit products that can be used to finance connections and appliances.

Electricity and enterprise development in Nepal

Since 2003, the Government of Nepal has been providing rural communities with access to electricity, forming Community Rural Electrification Entities (CREE). When compared to conventional utility-managed electrification, the operational efficiency of CREE is high, which might enable enterprises – including those owned by women, historically excluded groups and individuals from disadvantaged social backgrounds – to develop. Winrock International Institute for Agricultural Development is leading the research project, which will compare economic activities spurred by electrification implemented by decentralised CREE versus economic activities spurred by the centrally managed Distribution and Consumer Service (DCS).

Simon Trace, EEG’s programme director, said: “Investment in electricity infrastructure in low-income countries can potentially deliver sustained improvements in economic development. However, without appropriate research on the links between energy and economic growth, it is difficult for policy makers to make informed decisions on which energy investments are the most appropriate.

“EEG brings together leading academics from across the world to build evidence around how sector reforms, innovative technologies and practicable actions can be used to help maximise the economic impacts of energy infrastructure investments in Sub-Saharan Africa and South Asia. The research findings should be extremely valuable in shaping future energy policy.”

The research projects join two others that are already underway; GridWatch and Renewable Energy Auctions.

EEG is a five-year applied research programme, led by Oxford Policy Management (OPM) and funded by DFID. Four transformational pathways form the basis of the programme; 1) improving policy, 2) mobilising investment, 3) creating the context for change and 4) building capacity. For further information, please visit www.energyeconomicgrowth.org.

ENDS

Notes to editors

EEG’s four main research areas in more detail:

Efficient and productive use

A lack of productive equipment and uses can mean investments in electricity supply fail to drive growth. Inefficient use exacerbates supply constraints, local pollution and global climate change.

EEG is researching ways in which electricity supplies could be used more productively throughout society, how buildings and appliances can be made more energy efficient, the ways in which policies can be used to promote energy efficiency, and the impact of improved energy efficiency on business productivity and household incomes.

Reliability

Developing countries are plagued by chronic load shedding – electricity shutdowns – and blackouts that constrain economic productivity and leave people in the dark. EEG is investigating ways of improving the reliability of electricity systems in developing countries.

Renewable energy

Sub-Saharan Africa and South Asia’s abundant river systems, bioenergy, sunshine and wind offer clean, renewable and affordable sources of energy that, as of yet, remain largely untapped. EEG is researching sustainable ways of utilising these resources to increase the generation capacity of energy systems in focus countries.

Grid access

Nearly one billion people in Sub-Saharan Africa and South Asia have no electricity in their homes, despite living under or in close proximity to electricity grids. EEG is exploring the best technologies for connecting households and businesses in different locations, determining the role of government in improving electricity access, and examining the technological, economic and institutional challenges and opportunities in providing people with electricity access for the first time.