In 1879, the year Thomas Edison invented a workable light bulb, the population of the world was 1.2 billion, all living without electric lighting. One hundred and forty years later, electricity remains inaccessible for a little more than 800 million people. For hundreds of millions more, flicking a light switch is a roll of the dice—sometimes the light turns on, but all too often power outages mean that candles and kerosene lamps need to be pressed into service.
For many decades, this situation has posed a stubborn hurdle for efforts to reduce poverty globally. Yet, research from different parts of the world has shown that electrification can transform economies and increase incomes by opening the door to commercial activity of all kinds—from small-scale manufacturing to shops that stay open after dark. In Brazil, for example, the expansion of hydro-electricity led to significant improvements in income and productivity and higher levels of education. In South Africa, improvements in electricity access helped increase female labor employment. Unreliable power has also been shown to increase the cost of manufacturing and lower productivity, while likely making it impossible to start many businesses. It is therefore no exaggeration to say that solving the energy access problem is one of the greatest development challenges of this generation.
So why do so many of the rural poor in large parts of Asia and Africa still live without power? Contrary to what one might think, it is all too often not because of a lack of money to generate enough electricity. India, for example, not only has more than enough generation capacity to meet current demand, in 2018-19 only about 50% was used.