Apart from universal access, the SDG also mentions reliable and modern energy. This is an important qualifier to have for end mile consumers connected to the central grid, as often the electricity that reaches these consumers comes at random hours during the day and that too of low voltage. This impacts the luminosity for lighting and the potential use for income generating livelihoods.

Ideally, in most public policies and strategies, electrification should be developed with an objective of maximising the expected development impact per unit of money invested, not only the capacity installed. The success of an electrification objective should be based on the impact, not the input. In order to maximise the development impact, focus going forward should be on maximising access to reliable electricity services for the budget available, rather than maximising added power generation capacity.

The problem in this context is that the standard analysis frameworks applied by governments, institutions and donors for developing electrification plans and policies fail to properly capture the development value of access to electricity. The standard ‘Power Merit Order’ prioritises projects based on cost per watt installed or per kilowatt hour (kWh) generated. However, research indicates that the value of a kWh in a development perspective is dependent on its use. The development value is likely higher for one kWh used to provide high quality evening lighting to 60 off-grid households, relative to running one machine wash or 45 minutes of air conditioning for one grid connected household with the same kWh.

The same way, India assesses the Levelised Unit Cost of Electricity (LUCE) of different electrification efforts based on the traditional power generation i.e. Lowest cost per installed capacity (Wp or KWh). This Power Merit Order typically shows that a grid project has the lowest cost per KWh generated.

With energy efficiency measures in basic household appliances, 1 Kwh/week can give you 4 lightbulbs, mobile charging and a TV. A fan run on DC electricity may require slightly more than 1 KwH. With this low energy consumption required for basic services, the traditional power generation order fails to reflect the very high development impact of these services provided within 1 Kwh. With access to lighting, entire generations can be educated. It can be seen that these first few Kwhs providing access to basic services like lighting have the highest development impact per Kwh. The fact that lighting for a household can now be provided with 80-90% less Kwhs though the use of LED bulbs instead of incandescent light bulbs does not reduce the development impact from providing light, even if the power used is now very small.

This changed unit, when put into a framework, reflects the true value of each Kwh. As an addition to the Power Merit Order, it is time for an ‘Access Merit Order’. Instead of measuring cost per ‘unit of power’ (i.e. per Watt or kWh), this new framework measures cost per ‘unit of access’. If the unit power i.e. Kwh is replaced with ‘units of access’, a different picture will emerge for electrification efforts. For example, if the tiers of access are multiplied by the number of households provided access, each project represents a number of access units. The total budget allotted for electrification efforts divided by units of access gives the cost per unit of access.

All the households that receive access to electricity will be able to use this electricity to reduce their spending on kerosene, dry batteries, candles and/or diesel generators. Hence, there is a modest, but significant ability to pay for the electricity received in order to secure a robust electricity service that later can be maintained and scaled.

Allowing for this perspective and taking into account a model of community co-financing, projects will be able to provide access to an even higher number of households over time, making the payback time for a stand-alone solution 40 months. Disallowing the hidden subsidies, a grid project comparatively has a payback time per connection of 550 months.

Scaling of the energy access sector is what is truly required for effectively implementing a goal which says universal access to all. Behind the SDG Goal 7 lies an expectation that in order to achieve it the share of population gaining access increases and not doubling of global energy installed capacity and generation.

In order to get the highest possible development impact per unit of money invested in electrification, the Access Merit Order could be actively used alongside the Power Merit Order when electrification strategies are devised and revised going forward. Only then can access be the key driver of development and poverty alleviation. q

² Census of India. 2011.

³ SE4All. 2015. Global Tracking Framework – Key Findings.

⁴ The Differ Group. 2015. The Access Merit Order.

⁵ Lipton, Chad. 2015. "Microgrids Key to Bringing a Billion Out of the Dark". National Geographic.