Beyond free electricity: The costs of electric cooking in poor households and a market-friendly alternative |
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| Affiliation: | 1. Council for Scientific and Industrial Research (CSIR), Natural Resources Environment, P. O. Box 395, Pretoria 0001, South Africa;2. Stockholm Environment Institute - Africa Centre, P.O. Box 30677, Nairobi 00100, Kenya;3. Integrated Research System for Sustainability Science (IR3S), University of Tokyo, Administration Bureau Building 2, 7-3-1 Hongo, Bunkyo-ku, Tokyo 113-8654, Japan;4. Eduardo Mondlane University, Faculty of Sciences, Department of Physics, The Main University Campus; P. O. Box 257, Maputo, Mozambique;5. GreenLight Lda., Rua de Argelia 159, Maputo, Mozambique;1. Environmental Health Department, Centre for Population Health Research, National Institute of Public Health (INSP), Cuernavaca, Morelos, Mexico;2. Clinical Epidemiology Department, National Institute of Respiratory Diseases (INER), Mexico City, Mexico;3. Institute for Ecosystem and Sustainability Research, National Autonomous University of Mexico (UNAM), Morelia, Michoacan, Mexico;4. Interdisciplinary Group on Appropriate Rural Technology (GIRA), Patzcuaro, Michoacan, Mexico;5. Escuela Nacional de Estudios Superiores Unidad Morelia, National Autonomous University of Mexico (UNAM), Morelia, Michoacan, Mexico;6. Tobacco and COPD Department, National Institute of Respiratory Diseases (INER), Mexico City, Mexico;7. Hubert Department of Global Health, Emory University, Atlanta, GA, USA;1. Sirindhorn International Institute of Technology, Thammasat University, Pathumthani, 12120, Thailand |
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| Abstract: | The South African government is introducing a poverty-reduction policy that will supply households with a monthly 50 kWh free basic electricity (FBE) subsidy. We show that FBE distorts the energy choices of poor households by encouraging them to cook with electricity, whereas alternatives such as liquefied petroleum gas (LPG) can deliver a similar cooking service at a much lower cost to society. An alternative energy scheme, such as providing households with clean energy credits equivalent in value to the FBE's cost, could deliver additional energy services worth at least 6% of total household welfare (and probably much more) at no additional public cost; those benefits are so large that they would cover the entire cost of LPG fuel needed to implement the scheme. The analysis is extremely sensitive to the coincidence of electric cooking with peak power demand on the South African grid and to assumptions regarding how South Africa will meet its looming shortfall in peak power capacity. One danger of FBE is that actual peak coincidence and the costs of supplying peak power could be much less favorable than we assume, and such uncertainties expose the South African power system to potentially very high costs of service. |
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