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Report blames COVID-19, Ukraine war for push back towards universal energy access 

By Chinedum Uwaegbulam
02 June 2022   |   3:55 am
The COVID-19 pandemic, with its several waves since its outbreak in early 2020, has been a key factor in slowing progress toward universal energy access. Globally, 733 million people still have no access to electricity, and 2.4 billion people yet cook using fuels detrimental to their health and the environment.

• 670m people will remain without electricity by 2030
• AfDB: Africa needs annual investment of $40b on energy

The COVID-19 pandemic, with its several waves since its outbreak in early 2020, has been a key factor in slowing progress toward universal energy access. Globally, 733 million people still have no access to electricity, and 2.4 billion people yet cook using fuels detrimental to their health and the environment.

At the current rate of progress, 670 million people will remain without electricity by 2030 – 10 million more than projected last year. The share of the world’s population with access to electricity rose from 83 per cent in 2010 to 91 per cent in 2020, increasing the number of people with access by 1.3 billion globally. The number without access declined from 1.2 billion people in 2010 to 733 million in 2020.

This was contained in the 2022 edition of Tracking SDG 7: The Energy Progress report, released yesterday, which showed that the impacts of the pandemic, including lockdowns, disruptions to global supply chains and diversion of fiscal resources to keep food and fuel prices affordable, have affected the pace of progress toward the Sustainable Development Goal (SDG 7) of ensuring access to affordable, reliable, sustainable and modern energy by 2030.

According to the report, international public financial flows to developing countries in support of clean energy decreased for the second year in a row, falling to $10.9 billion in 2019, despite the immense needs for sustainable development in most countries and growing urgency of climate change. The amount was down by nearly 24 per cent from the previous year and may be worsened by the pandemic in 2020.

Advances have been impeded, particularly in the most vulnerable countries and those already lagging in energy access. Nearly 90 million people in Asia and Africa, who had previously gained access to electricity, can no longer afford to pay for their basic energy needs.

The impacts of the COVID-19 crisis on energy was further compounded in the last few months by the Russian invasion of Ukraine, which has led to uncertainty in global oil and gas markets and has sent energy prices soaring.

Africa remains the least electrified in the world with 568 million people without electricity access. Sub-Saharan Africa’s share of the global population without electricity jumped to 77 per cent in 2020 from 71 per cent in 2018, whereas most other regions saw declines in their share of the access deficits. While 70 million people globally gained access to clean cooking fuels and technologies, this progress was not enough to keep pace with population growth, particularly in Sub-Saharan Africa. 

The report finds that despite continued disruptions in economic activity and supply chains, renewable energy was the only energy source to grow through the pandemic.

However, these positive global and regional trends in renewable energy have left behind many countries most in need of electricity. This was aggravated by a decrease in international financial flows for the second year in a row, falling to $10.9 billion in 2019.

SDG7 targets also cover energy efficiency. From 2010 to 2019, global annual improvements in energy intensity averaged around 1.9 per cent. This is well below the levels needed to meet SDG7’s targets and to make up for lost ground, the average rate of improvement would have to jump to 3.2 per cent.

In September 2021, the United Nations High-Level Dialogue on Energy brought together governments and stakeholders to accelerate action to achieve a sustainable energy future that leaves no one behind.

In this context, the SDG7 custodian agencies – International Energy Agency (IEA), International Renewable Energy Agency (IRENA), United Nations Statistics Division (UNSD), World Bank and the World Health Organisation (WHO) – are with this report, urging the international community and policymakers to safeguard gains toward SDG7; to remain committed to continued action towards affordable, reliable, sustainable, and modern energy for all; and to maintain a strategic focus on countries needing the most support.

IEA Executive Director, Fatih Birol, said: “The shocks caused by the pandemic reversed recent progress towards universal access for electricity and clean cooking, and slowed vital improvements in energy efficiency, even as renewables showed encouraging resilience.

“International public financing for renewable energy needs to accelerate, especially in the poorest, most vulnerable countries. We have failed to support those most in need. With only eight years left to achieve universal access to affordable and sustainable energy, we need radical actions to accelerate the increase of international public financial flows and distribute them in a more equitable manner, so 733 million people who are currently left behind can enjoy the benefits of clean energy access.”

Vice President, Infrastructure, World Bank, Riccardo Puliti, said: “We believe SDG7 is and remains an achievable goal and we urge governments and the global community to scale up efforts to integrate universal energy access into national energy transition plans, and to focus on the most remote, vulnerable and poorest unserved populations to ensure no one is left behind.”

Recall that the African Development Bank (AfDB) had at the bank’s annual meetings in Ghana last week, said Africa will need an annual investment of $32 billion to $40 billion along the energy value chain to achieve universal access for electricity by 2030.

The AfDB’s African Economic Outlook 2022 unveiled at the meeting revealed that a total annual climate financing gap for energy under the New Deal stood at $17 billion to $25 billion. It said the continent’s large economies like Egypt, Nigeria and South Africa accounted for about 33 per cent of the gap.

The outlook said about $15.5 billion, which represented 26 per cent of the total climate finance inflows to Africa, were channeled to the energy sector between 2019 and 2020.

MEANWHILE, Nigeria’s 11 Distribution Companies (DisCos) could not pay N62.167 billion of the N138.633 billion worth of energy invoices they received for power generation in January and February 2022. And apart from Eko DisCo (in January) and Port Harcourt DisCo (February), the other nine DisCos failed to meet a Minimum Remittance Order (MRO) set out by the Nigerian Electricity Regulatory Commission (NERC) for them in each of the months.

Analysis of the market payment reports by the Nigerian Bulk Electricity Trading PLC (NBET), released yesterday indicated that the 11 DisCos got N138.633 billion energy invoice in January and February and NERC expected them to pay N126.851 billion as 91 per cent MRO but the DisCos could only raise N76.466 billion for the months, which is 55 per cent of the total sum, leaving them with N62.167 billion debt or 45 per cent of the total payment.

In January, the 11 DisCos got N72.301bn energy invoice in January and were expected to pay N63.245bn as 87.5% MRO but the DisCos could only raise N36.652bn for months, leaving them with N35.649bn debt or 49.31% of the total payment.
The amount remitted by the DisCos was just 50.69% of the N72.3bn, which translated to about 30% short of what NERC had ordered them to remit for January.

Eko DisCo met the requirement of the MRO in the January payment as the 10 other DisCos failed it although NBET said subsequent payments were expected from DisCos with outstanding MRO payments.

A breakdown of the N35.6bn debt indicates that Kaduna Electric led the debtor’s list with N5bn debt followed by IBEDC with N4.9bn and Benin with N4.7bn; the least debtor was EKEDC with N1.2bn. Other debtors are Enugu (N3.2bn), PHEDC N3.1bn, KEDCO N3bn, Ikeja N2.9bn, JEDC N2.69bn, Abuja owed N2.6bn and YEDC owed NI.19bn.

For the February payment, the 11 DisCos got N66.332bn energy invoice and were expected to pay N63.606bn as 95.89% MRO but the DisCos could only raise N39.814bn or 60.02% for the month, leaving them with N26.517bn debt or 35.87% short of the total payment. Their payment was also 62.6% of the 95.89% MRO set by NERC for February.

PHEDC met the MRO in February as the 10 other DisCos failed to do that but NBET said subsequent payments would be expected from the DisCos.

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