Is Electricity a Social Amenity?

business Education & Learning Energy Gist

World Bank, Sustainable Energy for All (SE4ALL) estimated the electricity access rate in Nigeria to be at 56.5% in 2018. If we assume a population of 200 million in Nigeria, it implies that about 87 million Nigerians do not have access to the basic infrastructure that provides electricity. This includes the transmission and/or distribution network to transport power from generating plants to the point of use in the case of grid systems or mini-grids in the case of distributed energy or standalone home systems.

Adequate provision of social amenities usually is critical to the quality of life available. Social infrastructure ensures the development of a state, satisfaction of the basic needs, and creation of conditions for its growth and development. It is worthy of note that the fundamental rights of a citizen in any given state are accessibility to portable water, good economical healthcare, good roads, security, quality and cost-effective education, and access to jobs.

Electricity access has positive correlation with economic growth

There is evidence of a positive correlation between electricity access and consumption with economic growth. An East Asian study shows that electricity consumption increase of 1% improves the GDP by 1.72%.

Improved access to electricity has been linked to a better quality of life, improved healthcare services, and better educational services. Increasing the productive use of energy has a positive correlation with improved productivity, enterprise creation, and increased employment. Access to electricity can be categorized as a social amenity and part of the foundation for scaling growth and development of a state.  It, however, comes at a cost and in recent times, there has been a trend to transfer the ownership and or operations of the electricity infrastructure from the state to the private sector. The expected result of this change in structure is increased energy access, improved quality of service, and efficient distribution of the cost.  In some cases, the emerging electricity framework is unbundling and privatization of the sector from a state-owned monopoly to a competitive market. This new structure is expected to promote competition, decentralized the sector, increase energy access, enable the energy transition to clean energy resources, and ultimately drive down the cost of a unit of energy.

While electricity can be categorized as a social amenity because it enables the provision of basic comforts such as lighting, ventilation, and cooling, it carries a cost that most governments are becoming reluctant to bear. The global average cost for a unit of household electricity is about 0.14 USD.

For conventional power generation, there is the cost to the excavation and refining of fossil fuel, power generation, transmission, and distribution. While there is no fuel cost for renewable energy technologies, there is an attendant cost for the manufacture of renewable energy technologies used for power generation.

Electricity is a social amenity with a cost and the role of the government should be in either managing the electricity infrastructure and providing power or in enabling a stable and competitive market with coherent policies and incentives that will ensure the least cost electricity.

About Onyinye

Onyinye is the first female Certified Energy Manager (CEM) in Nigeria, a versatile professional with 8+ years’ experience in ICT consulting and Energy Management. She is currently a consultant with the Energy Markets Regulatory Consultants in Abuja, Nigeria.
She is knowledgeable in Renewable Energy Systems, Energy Management, Power Utility Management, Energy Market Tariff Modelling and Power System planning. She is adept at conceptualizing and implementing innovative policies and systems that improve business efficiency.

A training facilitator for the Energy Training Center; she has delivered various training in the energy systems. Onyinye volunteers with AWEDI Networks a not for profit focused on developing women across the energy value chain.

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