SEE Energy Poverty Nexus

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SEE Energy Poverty Nexus

• Aleksandar Kovacevic

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Concept of Affordable Energy compromises

• Total social costs of energy that could be
  covered by productivity gains facilitated by
  suitable and secure energy supply
• In a way that the people could conduct economic
  activity to support
• Appropriate standard of living for themselves and
  their families within
• A healthy environment

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Energy Use in SEE Countries
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Energy Indicators for SEE countries
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Reduction of living space during a Winter period
Kosovo example
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Fuel wood main source of space heating in the
region
For most of population in Serbia, FYR Macedonia,
Montenegro, Bosnia Herzegovina and UNMIK fuel
wood is main source of space heating. Residential
energy mix in Croatia somewhat different.
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Average energy consumption per square meter of
living space is about 2-3 times greater than in
Northern Europe, yet in more than one in four
households the amount of heated space per person
is below minimum health standards while
available heating device is 2-3 times more fuel
intensive than usual technical standard
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Electricity Consumption in Serbia Montenegro
1995 - 2002
Unsustainable seasonal trends and households
electricity consumption
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Spatial density of fuel wood / lignite burning
creates environment problems in dense human
settlements. Smaller land plots per household in
poor suburbs or villages imply higher density.
Note Map is not accurate with changes in
political set up of the region as Montenegro is
now separate state while Kosovo is under the UN
mandate administered by UNMIK according to UN SC
Resolution 1244 . The boundaries eventually
displayed on the map, does not imply any
political or other preferences of the author or
any institution or organization.
Source UNDP, 2004
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Consequences are visible through poverty, social
and health surveys

• Excessive winter mortality and morbidity
• Lower working capabilities than actually possible
• Higher medical and energy expenditures than
  necessary
• Lower demand for local goods and services and
  therefore
• Limited employment opportunities and
• Low utilization of available infrastructure and
  capital
• Covered by excessive growth of financial
  intermediation and retailing in terms of GDP
  share
• That all creates

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Lack of aspirations and capacity to make use of
additional resources including social welfare
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• If minimally required comfort of living is to be
  achieved at 10 of income available to the poor
  and
• taking into account limited capabilities to
  improve international competitiveness of local
  industries in the short term,
• there is a need to boost the energy efficiency

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Intervention to reduce poverty could be
structured as follows

• Short term intervention to replace heating
  devices and improve use of fuel
• Provide 320000 efficient stoves to poor
  households in Bosnia Herzegovina, Serbia,
  Montenegro, FYR Macedonia, UNMIK and Albania
  during 2 years
• Provide another 2300000 efficient stoves to
  not-so-poor households on 24 months lease during
  next 10 years
• In longer term provide effective advice to assist
  clients to use savings for basic improvements in
  their housing and domestic hot water production
• Assist SME development to facilitate the process

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Costs, time and benefits

• Direct assistance to Governments to provide
  efficient stoves to poor about 100 m Euros.
• About 70 m Euros in credit facility to finance
  lease of new stoves to not-so-poor
• About one year for technology selection and
  dissemination, training and first installations
  that might involve about 20 m Euros in credits to
  local manufacturers to adopt their production
  lines and administrative costs
• Another year for actual installations and
  collection of old stoves, recycling of scrap
  metal etc.

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Benefits of direct assistance component only

• Saving of half of fuel wood (and lignite) from
  current consumption that gives pay back period of
  one year at given market value
• Certain increase in heated space per household
  member and better comfort with lower health and
  risk related expenditures
• Energy equivalent of about 300000toe per year of
  wood biomass available to replace imported fuels
  within local institutions
• Lower electricity bills and some additional
  employment opportunities as secondary effects

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Housing technical standards
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and long term impact these standards could have
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Performance Benchmarking System Needed!

• There is a need for benchmarking system to
  measure poverty reduction and human development
  gains against improvements in the energy use
• Biannual surveys, analyses and comparisons
  between regions / countries
• Could strengthen efficiency of intervention,
  improve governance and add credibility