Household energy, water vulnerability in Tajikistan and Kyrgyzstan: What have we learned?

Ben SlaySenior economist

UNDP Bureau for Europe and CIS

Third Inter-Agency Conference on Regional Coordination and Compound Risks in Central Asia

14 April 2011

Presentation overview• Focus on Tajikistan, Kyrgyzstan• Two key questions:

– “After the winter”: Is the glass half full, or half empty?• “Perfect storm”?• “Gradual improvement”?

– Role of donors/international community?• “Policy advising feast versus implementation capacity

famine”?• Focusing on what works, scaling up

• Provide some answers from:– Yesterday’s preliminary event– New research results

• Possible future directions

From “slow onset crisis” to . . .• “Perfect storm”?– Weak economies– Poor infrastructure– Poor energy, communal, public service delivery– Resistance to higher tariffs– Ineffective social protection– Corruption governance issues– Socio-political crisis (Kyrgyzstan 2010)

• Or signs of hope?– We survived the winter: because it was mild?

Energy consumption: Some improvement in 2010

2007 2008 2009 201090

92

94

96

98

100

Tajikistan: Elec-tricity consump-

tion (2007 = 100)

Sources: State statistical agencies, UNDP calculations.

2007 2008 2009 20100

20

40

60

80

100

120

140

160

Electricity consumption*

Coal consump-tion***

Gas consump-tion~

Kyrgyzstan (2007 = 100)

Household energy, communal services inflation rates: High, but falling

Energy Communal services

63%

73%

41%

53%

21%26%

2008 2009 2010

Energy Communal services

30%

25%22%

20%

14%

32%2008 2009 2010

Tajikistan: Annual average inflation rates. Kyrgyzstan: Annual average inflation rates.

Other signs of hope

• Kyrgyzstan:– Big improvements in water levels in Toktogul HPP– Collection rates in electricity sector have improved– Fuel and Energy Sector Transparency Initiative• Better energy sector regulation, corporate governance• Civic engagement

• Tajikistan:– New generation capacity (Sangtuda 1)– New transmission capacity (South-North high

tension line)

• New official household survey data are available for Tajikistan, Kyrgyzstan

• UNDP poverty and social impact assessments– On energy, communal service sectors in Kyrgyzstan, Tajikistan– Available on conference website

• But:– Survey data do not always correspond to production and sales data

provided by energy companies– Survey data on household expenditures do not always agree with

national income accounting data on consumption expenditure– Survey data not always internally consistent– Major survey data gaps on household access to communal services

remain

Poverty and household access to energy: New data and data issues

8

National Dushanbe Villages93%

94%

95%

96%

97%

98%

99%2007 2009

National Dushanbe Villages

390

419

364357

477

327

2007

2009

Link between grid connections, electricity supplies is broken in Tajikistan . . .

Average monthly household electricity consumption (kWh)

Share of households

using electricity

Source: State Statistical Agency

Shares of households reporting electricity cut-offs

. . . And in Kyrgyzstan

10

International affordability benchmarks (share of household expenditures devoted to energy spending)

Electricity Heat Water

World Bank 10-15% 3-5%

WHO 10%

UNECE 15%

UK gov’t 10% 3%

US gov’t 6% 2.5%

Affordability: How much household spending on energy is too much?

Kyrgyzstan: Share of energy in household spending seems low . . .

What revolution??

12

National Dushanbe

34%

26%

40%

32%

AveragePoorest quintile

Rural Other urban

35%32%

38%

55%AveragePoorest quintile

. . . While in Tajikistan, it seems very (too) high?

Share of household expenditures devoted to energy, 2009 data. Source: State Statistical Agency.

What do people heat with? In Kyrgyzstan—electricity and coal (especially the poor)

Shares of household

energy spending on energy

sources (2009)

Source: National Statistical Committee

14

Wood Electricity Dung Coal Other

40%

26%

17%13%

4%

44%

32%

10%12% 12%

2007 2009

Half the population heats with wood and dung . . . With impli-cations for health, deforesta-tion, gender, children

In Tajikistan: Much greater reliance on firewood (and dung)

Source: State Statistical Agency

Energy, water, and social policy• Two key questions:– Can social policy mitigate household energy and

water insecurities?– Is social policy become better targeted?

• Answers: No, and no• Household energy insecurity can be reduced by:– Off-grid small hydro, other decentralized renewables– Energy efficiency

• Household water insecurity can be reduced by:– Reforms of communal services, local governance– Rural water, infrastructure projects financed by

central, local government budgets, donors

What is to be done? Two key questions for the international community

• What does this research tell us?

• “Policy advising feast with an implementation capacity famine?” or “Let’s identify what works and scale it up”?

What does this research tell us?• Evidentiary basis for understanding household

energy vulnerability much better . . .• . . . But there are still many open questions:– Are the shares of household expenditures devoted

to energy correct?• Support for national statistical offices?• Independent surveys, based on comparable

methodologies?• Willingness to pay?

– What are the implications of different composition of energy use?• Tajikistan: sustainable forestry?• Kyrgyzstan: social, environmental implications of coal?

Emerging lessons from Tajikistan’s experience with small hydro

• Key obstacles:– Low electricity tariffs– Weak national capacity for construction,

maintenance of small hydro facilities– Regulatory/legal lacunae• Why should Barqi Tojik buy expensive, risky electricity

from small hydropower plants?• But—progress has been made:– Legal framework for feed-in-tariffs now in place– Trust fund for renewable energy can play “market

maker role”

Thank you very much!

Бoльшoe Cпacибo!