Energy poverty in any country is mainly assessed by two significant dimensions: accessibility and affordability. The unavailability of energy can impede access to basic needs such as healthcare, education, and communication, hindering communities’ overall development and progress.

Therefore, easy access to affordable energy is determined as one of the fundamental indicators for any nation’s economic standing and social prosperity as it helps improve the living standard of the individuals.

The United National Development Programme (UNDP) reported that one out of 10 people still lacks access to electricity. According to the latest International Energy Agency (IEA) report, the number of people without access to electricity was expected to rise globally by nearly 20 million in 2022, reaching almost 775m.

Pakistan, being a developing economy, is also facing the same dilemma. Around 40m people have no access to electricity, which constitutes almost 25pc of its population.

In rural areas, 44pc of domestic residents in more than 40,000 villages have no access to grid electricity

The situation is more alarming in rural areas, where 44pc of domestic residents in more than 40,000 villages have no access to the electricity grid. The main reason behind the scarcity of electricity in rural areas is the remote transmission system, which is very expensive and complex due to various technical, socio-economic and environmental barriers.

The rural communities of these remote areas still rely on fossil fuels (ie charcoal, firewood, kerosene oil) and other raw materials to fulfil their very basic needs, eg, lighting, cooking, and heating. However, such resources are vulnerable to the environment and have horrendous effects on the health of people.

According to the World Health Organisation, each year, about 4m people die from illnesses attributed to domestic air pollution from cooking stoves fuelled by biomass, kerosene, and coal.

Moreover, the United Nations Development Programme reported that energy is the primary cause of climate change. It accounts for 73pc of human-caused greenhouse gases.

On the one hand, load demand is much lower in rural regions than in urban areas. Therefore, grid expansion is not viable because of the high investment costs involved in transmission line infrastructure. On the other hand, centralised power generation mainly depends on fossil fuels, which are not environmentally friendly due to CO2 emissions and thus negatively affecting climate change. This alarming situation demands energy transition with a 3D formula — decentralise, decarbonise, democratise.

Therefore, rural electrification involving energy transition is the need of the hour in isolated and remote areas to overcome energy poverty and attain socio-economic and environmental benefits.

In this regard, rural electrification can improve the quality of life with the availability of public services, such as education, health, water, and sanitation. Rural electrification can also facilitate the energisation of water pumps, filters, or treatment plants, ensuring safe and sufficient water supply and sanitation.

It can also support emergency response and disaster relief by providing backup power or communication systems. It can enable rural households and businesses to increase their income and productivity because they can energise their irrigation system with energy access.

In this way, decentralised generation based on distributed renewable energy resources (mini/microgrids, off-grid energy schemes) offers promising alternatives in pursuit of a sustainable society benefiting underprivileged communities still trapped in energy poverty.

Unfortunately, our decision makers mainly focused on grid-connected consumers based on centralised power generation to address the energy crisis and overcome supply and demand gaps in urban areas facing the problem of long hours of load shedding.

They have paid little attention to energy poor rural communities which have no access to grid electricity. In this regard, there is a dire need for strong vigilance from policymakers to treat rural electrification and energy poverty on a priority basis to ensure the supply of reliable and affordable clean energy, otherwise it will be challenging to meet targets of Sustainable Development Goal 7.

Another perspective of energy poverty is when consumers cannot afford it. As per the World Energy Outlook and IEA report, around 75m people who recently gained access to electricity are likely to lose the ability to pay for it. Volatile fuel prices account for 90pc of the rise in the average costs of electricity generation worldwide.

Pakistan faces the same dilemma, which disproportionately impacts rural communities that are the least equipped to cope with energy poverty. Energy poverty in Pakistan has also increased as a result of high tariff costs, circular debt, the removal of subsidies, fiscal burdens, limited access to modern clean energy, and financial burdens on people due to high inflation and rupee devaluation.

The main reason behind energy poverty with respect to energy affordability is that Pakistan’s power system heavily relies on conventional energy resources (ie imported expensive fossil fuels).

By addressing energy poverty comprehensively and adopting sustainable and inclusive policies holistically, the country can pave the way toward a brighter future, where energy becomes a catalyst for progress rather than a barrier to opportunity.

The writer is a faculty member and PhD Research Scholar at Mehran University of Engineering &Technology. Email: hussainshafqat.memon@gmail.com

Published in Dawn, The Business and Finance Weekly, September 11th, 2023