Energy in Developing Countries

Annual energy use is more or less constant in OECD countries, but is growing by around 5% p.a. in the rest of the world, driven by economic development and population growth. However, per capita energy use in non-OECD countries is still only 30% of that in OECD countries on average, and (e.g.) is 30 times larger in the USA than in Bangladesh. It is estimated that nearly 1.3 billion people do not have access to electricity, around 3 billion people cook and heat their homes using open fires and simple stoves burning biomass (wood, animal dung and crop waste) and coal. Over 4 million people die prematurely every year as a result of illnesses attributable to household air pollution from cooking with solid fuels.

Providing the energy needed to support development at an acceptable cost, and ensuring that it is used efficiently, while protecting the local environment, is a huge challenge – especially for countries that are also striving to contribute to the global public good of limiting use of fossil fuels. Different technical approaches, and economic and regulatory measures, will be appropriate in different countries, but there are some common questions, such as

  • How to grasp and fund opportunities to adopt low-carbon development paths for the anticipated rapid expansion of energy infrastructure, transport systems, and cities?
  • Can such ‘green growth’ strategies be compatible with the immediate need to mobilize investment in labour-intensive activities so as to address current poverty and human development objectives?
  • How should governments approach domestic energy pricing in resource-rich economies?  How can they resist political pressure for maintaining inefficient and regressive energy subsidies to firms and consumers, the benefits of which are typically captured by the well-off?
  • Could low carbon user-centric local energy systems obviate the need for constructing large centralised networks?
  • How can the large-scale uptake of new off-grid energy (and other) technologies be encouraged in developing countries?

Research in Oxford

Oxford scholars are studying, and providing technical, economic and policy advice on energy issues across the globe, in OECD countries and the rest of the world, including in China, India, Africa, and South America. Oxford scientists and engineers are also developing robust, low maintenance, low cost energy technologies for use in rural areas.

Policy, economics and politics

An indication of the wide range of Oxford’s work on energy policy, economics and politics in developing countries can be obtained by looking at the interests of the people involved.   Examples include:

oil pumps1) Developing domestic resources: Managing extraction of natural resources and the effective use of resource revenues is a challenge for many countries, especially in the developing world and for high value resources such as hydrocarbons. Poor management and governance has destabilised economies – and in some cases political systems – and led to waste and inefficient use of the resource itself. Oxford economists are analysing the causes of such failures and formulating policies for more effective resource management, including: contract negotiation with oil and gas majors; macroeconomic and tax policy; development of downstream energy policies; development of coherent ‘local content’ policies that ensure domestic participation in economic development associated with resource discoveries. This work has informed policies in the International Monetary Fund, the World Bank, the World Trade Organisation and regional development banks. Work is now focusing on the new ‘energy economies’ of Africa, where countries including Ghana, Mozambique, Tanzania, Uganda and Kenya face the challenges of developing large recently-discovered hydrocarbon resources.

2) Energy Access: Researchers at the Oxford Institute for Energy Studies are addressing the problem of energy subsidies in India. Energy consumption is expected to grow at 3 % p.a. in the next two decades (even faster than in China), and half the population still lacks access to modern commercial energy. Low carbon sources are currently unable to compete with subsidised fossil fuels. The evidence shows that these subsidies have largely benefitted the well-off rather than the poor and led to distortions in consumption patterns.  Research at Oxford focuses on the fiscal (taxation) system for upstream exploration in oil and gas and reforms to domestic pricing. The aim is to resolve the trade-offs between energy access and the transition to efficient and sustainable economic development. This research feeds directly into policy debates in India and the findings have been quoted in policy documentation on the allocation and use of natural resources in India.

ebikes3) Sustainable travel is an important transport policy objective, implying less dependence on oil and substantially reduced carbon dioxide (CO2) emissions. A study of Jinan (China) by researchers at Oxford’s Transport Studies Unit develops normative and qualitative scenarios for the urban transport sector in the rapidly urbanising Asian context, which are combined with a quantitative understanding of different city futures. Each scenario is compared with the current business as usual projections for transport CO2emissions, and alternative policy pathways are described to move from the current highly oil dependent future to one that uses substantially less carbon and oil-based energy sources.

4) Regulation: Economists at the Oxford Institute for Energy Studies analysed the Colombian regulatory framework to determine whether it was discouraging the development of renewable power. Focusing on wind power, they concluded that the regulations under-estimate and hence under-remunerate the contribution of wind power to system reliability, especially during sustained periods of low rainfall that correspond to ‘el Niño’ years. Regulations thereby discourage investment in this technology.

5) Governance: Oxford political scientists are studying whether the experience of countries in the Caspian region supports the conventional wisdom that developing countries with major income from energy extraction and export tend to experience dysfunction in governance. In the usual interpretation of resource curse theory, rents accruing from export allow governments to concentrate power and avoid democratization, and reliance on resource revenue generates distortions in national development, as well as inequality, as non-resource sectors are neglected and fall behind. The experience of energy exporters in the Caspian Basin is frequently cited in support of these propositions. However, comparison of energy producers and non-producers finds no significant difference in the quality of governance, casting doubt on the validity of the theory, at least in the Caspian regional context.

Technologies

Almost all the energy technologies being developed in Oxford do or could play a role in both developing and developed countries. Many, such as potentially cheap solar PV energy based on perovskites (see solar), could be enormously important in both developing and developed countries. Work on some technologies is however motivated primarily by the special situation in developing countries. Examples include:

1) Small scale generators: Oxford engineers, who developed Stirling refrigerators that are flown by NASA, are developing a novel but robust Stirling engine that would act as a general purpose transformer of heat into useful power. This engine does not need refined fuel and can burn waste, has good efficiency (30 – 40%), and could be deployed on scales of 1 to 100 kW, which would be appropriate for individual houses or villages.

cooker2) Solar cookers: Oxford engineers and physicists have developed a novel low cost solar concentrator. This device is currently being trialled as a low cost solar cooker, for permanent use or in emergencies, as described in the accompanying case study. In the future, the concentrator could be used to generate electricity by focussing sun-light onto the Oxford Stirling engine or photovoltaic cells.

3) Local bioenergy use: Oxford scientists are working to develop bioenergy crops suitable for hot arid conditions (see also bioenergy). These plants could be digested to produce methane, which can be stored to generate electricity on demand and provide back-up for variable renewables. Oxford engineers are studying ways to significantly reduce the cost of anaerobic digestion and the scale on which it becomes economically viable (including mimicking cows, which digest much faster than man-made devices). If successful, this would enable widespread bioenergy production from agricultural waste as well as feedstock grown on marginal land.

fridge24) Refrigeration: An ‘Extended Time Refrigerator’ is being developed by Oxford engineers, in which trays made of a phase change material would be fitted inside a conventional refrigerator. The trays will ensure that food and medicine are kept at the right temperature for up to 12 hours when electricity is not available as a result of power cuts or because the source (e.g. solar PV) is intermittent.

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Policy, economics and politics

Technology

Meet energy in developing countries researchers