Does Reform of Energy Sector Networks Improve Access

for the Poor? Stepbenz Powtell Unless energy can be produced and delivered more cheaply, it will stay beyond the reach of many andrkas of the poor. For energy delivered through networks, the costs that matter are not only the unitStarks energy costs, but the costs of extending the network-into an urban slum, for example, or to a rural town. Extending a network can be very expensive-a major barrier to access for poor households and small or isolated communities. A central goal of the reform of electricity and gas networks, now occurring in an increasing number of developed and developing countries, is to provide incentives to reduce the costs of producing energy and getting it to consumers. New technologies in electricity are drastically reducing costs. But transmission costs are still a major hurdle to expanding networks in isolated or lightly populated areas. As a result it is the urban poor who stand the greatest chance of benefiting from network reform. For the rural poor, alternative solutions, including mini-grid and off-grid services, may be required. Electricity reform is based on the premise that mar- electricity cheaper for the poor who already ket mechanisms supply electricity much more effi- have access to it, and provide it to those who ciently than central planning can.1 But how will do not. It analyzes the fundamental costs of gen