The principle of ‘leave no one behind’ is inherent to the Sustainable Development Goals, including SDG 7 on ensuring access to affordable, reliable, sustainable and modern energy services for all by 2030. One of the key challenges in achieving SDG 7 is providing modern and affordable energy services for the poorest and most disadvantaged people, defined in this paper as 'energy safety nets'.
Consumer subsidies are one way to do this, but they have significant shortcomings. Social assistance mechanisms may be another way, but their effectiveness and impact on the delivery of energy access to poor households is little understood. This literature review identifies how energy safety nets have been used in 62 predominantly middle-income countries.
- A broad range of measures could be described as energy safety nets, from general energy subsidies to highly targeted measures for specific social groups. However, the literature on social safety nets often excludes them.
- General energy consumer subsidies are inefficient in reducing energy poverty, but their removal could be damaging for poor people who cannot afford the full cost of modern energy services.
- Social safety nets and cash transfers may not be the answer for energy access objectives. Cash transfers may be used for other expenditure, and general social safety nets require time and resources to develop.
- Targeted energy subsidies could be an alternative, though their effectiveness in reducing energy poverty is little understood. There is a need for detailed country case studies, to explore where and how targeted subsidies could reduce energy poverty.