Energy Poverty: Why 675 Million People Still Lack Electricity and How to Fix It

What Is Energy Poverty and Why Does It Still Exist in 2026

Energy poverty is defined as the lack of access to modern, affordable, reliable, and clean energy services — principally electricity and clean cooking fuels. In its most acute form, it means no light after dark, no refrigeration for food or medicine, no way to charge a phone, and cooking over an open fire that fills lungs with toxic smoke. According to the International Energy Agency's most recent World Energy Outlook, approximately 675 million people still lacked access to electricity in 2023. A further 2.3 billion people — more than one in four people alive — cook using solid biomass fuels: wood, charcoal, crop waste, and animal dung.

The persistence of energy poverty into the 2020s is not, a technological failure. The technologies to provide universal electricity access and clean cooking have existed for decades. Solar energy, mini-grids, biogas digesters, LPG distribution networks, and improved cookstoves are all proven, commercially available, and increasingly affordable. The failure is one of finance, governance, and political will — a persistent gap between what the market can deliver commercially and what equity and human development demand. Understanding why this gap persists is the first step toward closing it.

Several structural factors maintain energy poverty:

• Geographic remoteness — the unelectrified are disproportionately concentrated in rural and peri-urban areas with low population density, where conventional grid extension has prohibitive per-connection costs
• Poverty itself — households below $3 per day cannot afford even modest electricity tariffs or upfront costs for clean cooking equipment, creating a poverty trap where poverty reduction requires energy access that poverty prevents
• Fossil fuel subsidies — the IMF estimates global fossil fuel subsidies at over $7 trillion annually (including implicit subsidies from unpriced externalities), distorting energy markets in ways that favor incumbent polluting fuels over clean alternatives
• Population growth outpacing infrastructure — in sub-Saharan Africa especially, demographic growth has partially offset electrification progress, meaning the absolute number without electricity remains stubbornly high even as electrification rates improve
• Financing gaps — IEA estimates suggest the world needs to invest roughly $35 billion annually in energy access by 2030, nearly double current levels

Progress is nonetheless real and significant. In 2000, approximately 1.7 billion people lacked electricity. By 2023, that number had fallen to 675 million — a reduction of over 1 billion people in two decades, driven by national electrification programs in India, Bangladesh, China, Brazil, and elsewhere. The challenge is that the remaining 675 million are disproportionately in the hardest-to-reach locations, served by the weakest institutions and the smallest budgets. Finishing the job requires both more ambition and smarter design than what got us this far.

How Many People Cook with Biomass and What Are the Health Consequences

The clean cooking crisis is in many ways the invisible twin of electricity poverty — less visible than dark villages, but more deadly. The World Health Organization and IEA jointly estimate that 2.3 billion people cook using biomass fuels — primarily wood, charcoal, animal dung, and crop residues — on open fires or inefficient traditional stoves. This produces toxic indoor air pollution at concentrations that can exceed outdoor pollution levels in major cities by a factor of ten or more, according to WHO data.

The health consequences are catastrophic:

• 3.2 million deaths per year — household air pollution from cooking with solid fuels caused an estimated 3.2 million premature deaths in 2020, according to the WHO. This exceeds annual deaths from malaria (600,000) and tuberculosis (1.5 million) combined
• Respiratory disease — chronic exposure to biomass smoke causes pneumonia, chronic obstructive pulmonary disease (COPD), and lung cancer. Children under five are most vulnerable; household air pollution is the single largest environmental risk factor for childhood pneumonia
• Cardiovascular disease — fine particulate matter (PM2.5) from cooking fires penetrates deep into lung tissue and enters the bloodstream, contributing to stroke and heart disease
• Eye damage — smoke from open fires causes significant rates of cataracts and conjunctivitis in women who spend hours daily cooking in smoke-filled spaces
• Pregnancy complications — exposure to biomass smoke during pregnancy is associated with low birth weight and premature birth, affecting child health outcomes for life

Women and young children are overwhelmingly most affected, because they spend the most time near the cooking fire. In many societies, cooking is exclusively the domain of women and girls, meaning the health burden of energy insecurity falls almost entirely on them. The poverty and health nexus is nowhere more starkly illustrated than in a mud-walled kitchen in rural sub-Saharan Africa, where a mother cooks daily over wood smoke that will shorten her life and damage her children's lungs before they have walked to school.

Beyond death and disease, the time burden of biomass collection is enormous. The UN estimates that women and girls collectively spend more than 200 million hours per day collecting water and fuel — the majority of which is biomass for cooking. This time cannot be spent in school, in paid employment, or in civic participation. The connection between energy poverty and gender inequality is therefore not rhetorical but material: every hour of fuel collection is an hour of education or economic opportunity foregone.

What Is the Energy Ladder and How Does It Guide Electrification Strategy

The energy ladder is one of the most widely used conceptual frameworks in development energy policy. First articulated by researchers at the Stockholm Environment Institute, it describes the typical progression of household energy use: from the most polluting, least efficient fuels at the bottom — raw biomass on open fires — through intermediate steps like kerosene, charcoal, and LPG — to clean modern energy at the top, including electricity and clean-burning fuels. The model predicts that as income rises, households climb the ladder, choosing cleaner, more convenient, more expensive fuels and appliances.

The energy ladder framework has both descriptive and prescriptive value. Descriptively, it explains patterns observed across dozens of countries: as rural incomes rise in India, households switch from wood to LPG for cooking; as urban incomes rise in Kenya, households shift from charcoal to electric induction. Prescriptively, it guides intervention design by identifying which step a household currently occupies and what incentives, subsidies, or infrastructure are needed to help them move up.

The ladder concept also has important limitations that modern energy access research has refined:

• Fuel stacking is common — households do not simply trade one fuel for another. They typically stack multiple fuels simultaneously, using LPG for quick cooking and charcoal for slow-cooked dishes that LPG canisters make too expensive
• The ladder is not always linear — off-grid solar is enabling communities to access electricity before ever having used kerosene reliably, skipping rungs entirely
• Gender shapes the ladder — women's preferences and decision-making authority over household energy spending are often distinct from men's, with women placing higher value on health co-benefits of clean cooking and men more focused on cost
• Affordability vs. availability — the ladder assumes households can access the fuels at higher rungs when they can afford them, but in many regions, LPG distribution infrastructure simply does not exist regardless of income

A more nuanced successor concept, the energy access pyramid, proposed by organizations including Sustainable Energy for All (SE4All) and the World Bank's Multi-Tier Framework, captures these complexities. Rather than a single ladder, it assesses energy access across multiple dimensions: capacity, availability, reliability, quality, affordability, legality, and health and safety. Under this framework, even households with some electricity access may score poorly on reliability or quality — the kind of intermittent, low-voltage electricity common from weak grids in rural Africa is not the same as the reliable power a city household in Europe or North America takes for granted.

What Is the Difference Between Grid Extension and Distributed Energy for Ending Energy Poverty

One of the most consequential debates in energy access policy is whether to extend centralized grids or invest in distributed energy solutions — and for whom each approach is most appropriate. The answer is not ideological but geographic and economic: it depends on population density, distance from existing grid infrastructure, demand profile, and the relative costs of each approach in a given context.

Grid extension — building new transmission and distribution lines from existing substations to unelectrified communities — remains the dominant electrification strategy globally. It offers the most power (grid electricity can support any appliance load), the lowest long-run tariffs in dense areas, and the most straightforward regulatory framework. India's Saubhagya scheme, which brought electricity connections to approximately 26 million households between 2017 and 2019, relied primarily on grid extension to rural areas within reasonable distance of existing lines. In contexts where communities are clustered and relatively close to the grid, extension is often the least-cost and most durable solution.

Distributed energy solutions — solar home systems, solar mini-grids, pico-solar lanterns, and biogas digesters — are increasingly cost-competitive or superior for:

• Remote communities more than 5–10 km from the existing grid, where line extension costs typically exceed $1,000–2,000 per household
• Sparsely populated areas where low aggregate demand makes centralized generation uneconomic
• Communities needing immediate access who cannot wait 5–10 years for grid planning and construction
• Applications where modest power levels (lighting, phone charging, small appliances) are sufficient and full grid-scale capacity is not needed immediately

The World Bank's ESMAP has developed geospatial electrification planning tools — including the OnSSET (Open Source Spatial Electrification Tool) — that map the optimal technology for each unelectrified location based on population density, solar resources, distance from existing grid, and relative technology costs. These analyses consistently find that for large portions of sub-Saharan Africa, standalone solar systems and mini-grids are the least-cost solution even at 2030 grid extension costs, and that waiting for centralized grid coverage for the most remote communities could add decades of delay to universal access.

The most effective national electrification programs combine both approaches. Bangladesh's remarkable success in reducing its unelectrified population — from over 50% in 2000 to near-zero by 2023 — used grid extension for peri-urban and semi-rural areas while deploying over 6 million solar home systems through the Infrastructure Development Company Limited (IDCOL) program in remote areas where grid extension was not viable. The key institutional insight is that grid and off-grid solutions are complements, not competitors, and that planning agencies need geospatial decision tools to assign each community to its optimal technology.

Power the change with the 'Clean Power Revolution' collection. Every purchase sends 30% of profits to clean energy initiatives.
Shop now, fuel the future!

What Are the Best Clean Cooking Solutions and Which Technologies Are Scaling

Solving the clean cooking crisis requires more than electrification. Even households with grid electricity often continue cooking with biomass because electric cooking appliances are expensive to purchase and operate, and LPG infrastructure may not reach rural areas. A dedicated policy focus on clean cooking — distinct from electricity access — is essential to address the 2.3 billion people still relying on polluting fuels. Multiple technology pathways are being scaled, each suited to different income levels, geographies, and cooking cultures.

Liquefied Petroleum Gas (LPG) is the most globally significant clean cooking fuel in terms of current reach. India's Ujjwala scheme — which provided free LPG connections to over 96 million low-income households between 2016 and 2023 — is the largest clean cooking intervention in history. However, refill affordability remains a challenge: many Ujjwala beneficiaries received initial connections but stopped refilling cylinders when subsidies were reduced, highlighting that upfront access and ongoing affordability are both necessary conditions for sustained clean cooking adoption. LPG is also a fossil fuel, making it a transitional rather than long-term solution in a net-zero context.

Electric induction cooking is the cleanest option where reliable, affordable electricity exists, producing zero indoor emissions and operating at efficiency levels significantly higher than gas. In countries like Kenya, where electricity access has expanded rapidly through the Last Mile Connectivity Project, electric pressure cookers and induction cooktops are growing rapidly in peri-urban markets. The challenge is that cooking over a multi-hour open fire cannot be replicated with a 1-kW induction cooktop on a solar home system — the power demand is too high, requiring either a grid connection or a substantially larger solar-plus-storage system.

Biogas digesters convert animal or agricultural waste into methane gas for clean cooking, while producing biogas slurry as a high-quality fertilizer. Household biogas systems are well-established in India (over 5 million installations), Nepal (over 400,000), and parts of sub-Saharan Africa. They are particularly appropriate for farming households with livestock, providing dual benefits of clean cooking fuel and improved soil fertility. The Biogas Programme for the Animal Husbandry Sector of Ethiopia, supported by SNV and the Netherlands government, has installed over 100,000 household digesters, demonstrating the model's viability in East Africa.

Improved biomass cookstoves occupy the lowest rung of the clean cooking ladder — they do not eliminate biomass burning but reduce harmful emissions by 30–80% depending on design. While not a long-term solution, they are a meaningful harm-reduction measure for the 2.3 billion who cannot yet access clean fuels. Organizations like the Global Alliance for Clean Cookstoves (now the Clean Cooking Alliance) have supported the distribution of tens of millions of improved stoves across Africa and Asia, reducing indoor air pollution in communities where clean fuel transitions are still years away.

What Is the Gender Dimension of Energy Poverty

Energy poverty is not gender-neutral. Across nearly every dimension — health impacts, time burden, economic opportunity cost, and decision-making power — women and girls bear a disproportionate share of energy poverty's costs. Understanding the gender dimension is essential not only as a justice issue but as a practical matter: interventions that ignore gender dynamics tend to be less effective, less sustainable, and less equitable than those designed with women's needs and agency at their center.

The most quantified gender dimension is time. Studies by the UN Women and IEA consistently find that in energy-poor households, women and girls spend 2–5 hours per day collecting fuel and water — tasks that men perform at far lower rates. In Ethiopia, women spend an average of 2.5 hours per day on fuel collection; in some parts of the Democratic Republic of Congo, that figure exceeds 4 hours. This time is not merely inconvenient: it is education and income denied. Girls who spend hours collecting fuel attend school less regularly, exit earlier, and achieve lower educational outcomes. Women who collect fuel have less time for paid work, civic engagement, and rest. The feminization of poverty and energy poverty are deeply intertwined.

The health burden falls most heavily on women too. Women cook, and they breathe smoke. In households using open fires, women cooking for three to four hours daily are exposed to pollution levels equivalent to smoking 400 cigarettes per year, according to WHO estimates. The 3.2 million annual deaths from household air pollution are disproportionately women and children. Maternal exposure to biomass smoke is also associated with complications during pregnancy and birth, extending the health burden to the next generation.

Women's economic empowerment is among the most direct beneficiaries of clean energy transitions. Studies from sub-Saharan Africa consistently show that when households gain access to solar lighting and clean cooking:

• Girls' school attendance and study hours increase, improving educational outcomes
• Women shift freed time toward income-generating activities, increasing household earnings by 15–30% in documented cases
• Women's health improves, reducing healthcare expenditures and care-giving burden
• Women gain purchasing power and decision-making authority over household energy spending
• Mobile phone charging access improves women's connectivity to markets, health information, and social networks

Gender-responsive energy policy means designing programs that target women as primary beneficiaries and decision-makers, not just passive recipients. ENERGIA — the international network on gender and sustainable energy — has documented numerous cases where clean energy programs that distributed products through women's groups, provided women with technical training, and ensured women's voices in tariff setting achieved higher adoption rates, better repayment, and more durable outcomes than conventional top-down distribution approaches. The gender equality and energy access agendas under the SDGs are not separate tracks — they are mutually reinforcing imperatives.

How Is SDG 7 Progress Being Tracked and Is the World on Course

The global community's commitment to universal energy access is formally encoded in SDG 7: Affordable and Clean Energy — Target 7.1 of which requires ensuring universal access to affordable, reliable, and modern energy services by 2030. Progress is monitored through the Tracking SDG 7 joint report, published annually by the IEA, IRENA, UN Statistics Division, World Bank, and WHO. The report is the authoritative global scorecard on energy access and represents the most comprehensive dataset available on who has power, who has clean cooking, and how rapidly conditions are improving.

The 2023 Tracking SDG 7 report presents a deeply concerning picture. The world is not on track for any of the major SDG 7 targets:

• Electricity access — 675 million people without electricity in 2022 (down from 733 million in 2019, but progress has stalled). At current rates, approximately 660 million people will still lack electricity in 2030 — a massive shortfall from universal access
• Clean cooking — 2.3 billion people without clean cooking in 2022. The clean cooking access rate has improved only marginally since 2015, with population growth largely offsetting gains in coverage
• Renewable energy share — renewables reached approximately 22% of total final energy consumption in 2021 (up from 17% in 2015), but the target of "substantial increase" requires faster growth in end-use sectors like industry and heating, not just electricity
• Energy efficiency — the global energy intensity improvement rate of around 1.5% per year in 2021 was below the 2.6% needed to meet SDG 7.3 targets

The COVID-19 pandemic disrupted progress significantly, reducing electricity connections in low-income countries as economic disruption hit utility revenues and construction programs. Russia's invasion of Ukraine in 2022 diverted political attention and financing from long-term energy access to short-term fossil fuel security in wealthier nations, further slowing the flow of climate finance to developing countries. The climate finance gap under the Paris Agreement's $100 billion per year commitment — which rich countries failed to meet until 2023 — has directly constrained energy access investment in the Global South.

There are genuine bright spots. The number of people gaining electricity access reached nearly 100 million per year in 2019 before the pandemic. Sub-Saharan Africa's electrification rate is rising faster than at any point in history. The renewable energy share of global electricity has grown substantially, with solar and wind now providing over 13% of global power. These trends, if accelerated, could still bring the world much closer to SDG 7 targets — but only with dramatically increased investment, policy ambition, and international cooperation.

Which Countries Have Achieved the Most Successful Electrification Programs

Amidst the global shortfall, a handful of countries have demonstrated that rapid, large-scale progress on electricity access is achievable — even in low-income settings. Their experiences offer replicable lessons in program design, institutional frameworks, financing structures, and technology deployment. Three case studies stand out for the scale and speed of their achievements.

Bangladesh is the most celebrated electrification success story of the past two decades. In 2000, just 20% of Bangladeshis had electricity; by 2023, access exceeded 98%. The transformation combined three distinct streams: rural grid extension through the Rural Electrification Board, the world's largest solar home system program through IDCOL (over 6 million systems), and rapid urban densification that brought peri-urban populations within reach of the grid. Bangladesh's success depended on a stable institutional framework, long-term financing partnerships with donors and multilateral banks, and strong political commitment sustained across multiple governments. The IDCOL solar model — using microfinance institutions as last-mile distributors and providing concessional loans to households — is widely cited as a template for combining commercial and concessional finance for off-grid access.

Kenya has achieved one of the fastest electrification rate improvements in sub-Saharan Africa. The Last Mile Connectivity Project, launched in 2015 with World Bank support, reduced connection costs for households from an unaffordable $400–600 to approximately $150, financed through small monthly additions to electricity bills. Kenya went from 23% electrification in 2009 to over 75% by 2022. The country has also become the world's most dynamic off-grid solar market — home to M-KOPA Solar and dozens of smaller operators — demonstrating that commercial off-grid solutions and grid extension can advance simultaneously. Kenya's experience is particularly notable for the role of mobile money: M-Pesa enabled pay-as-you-go solar financing that functioned seamlessly without formal banking infrastructure, connecting millions of the poorest Kenyans to electricity markets.

Ethiopia, with a starting electrification rate of under 30% in 2015, has made extraordinary strides through its National Electrification Program (NEP) and NEP-2.0. The program combines utility grid expansion with off-grid standalone systems for remote populations, targeting universal access by 2025. By 2023, electrification had exceeded 55% — an increase of over 25 percentage points in eight years. Ethiopia has also demonstrated that ambitious national programs can align grid and off-grid investment using geospatial planning to direct each technology to its optimal application. The World Bank, African Development Bank, and bilateral donors have co-financed NEP extensively, making Ethiopia a model for mobilizing international finance behind a credible national program.

Common threads across these successes include: clear national targets backed by political commitment, institutional vehicles for channeling both concessional and commercial finance, technology-neutral approaches that combine grid and off-grid solutions, last-mile distribution strategies that reach the hardest-to-connect populations, and transparent tracking systems that hold governments and implementing agencies accountable for results.

What Is the Financing Gap for Ending Energy Poverty and How Can It Be Closed

The single most cited obstacle to ending energy poverty is finance. The IEA calculates that achieving universal electricity access and clean cooking by 2030 would require annual investment of approximately $35 billion — yet current flows are roughly $16 billion per year. The $19 billion annual gap might sound manageable against the scale of global financial markets, but it has proven remarkably difficult to bridge for structural reasons that go beyond simple political will.

The financing challenge has multiple layers:

• Risk perception — international private investors perceive energy access projects in least-developed countries as high-risk due to currency volatility, weak regulatory frameworks, poor utility creditworthiness, and small project sizes. These perceived risks translate into high cost of capital that can add $0.05–0.10 per kWh to generation costs, undermining project viability even when technology costs have fallen substantially
• Project size — energy access investments are often too small for international capital markets. A $2 million solar mini-grid in rural Tanzania does not fit the transaction economics of a major infrastructure fund. Aggregation mechanisms — bundling dozens of small projects into investable portfolios — are essential but underdeveloped
• Misaligned incentives — national governments in low-income countries often prioritize large-scale centralized generation (dams, gas plants) that produces visible political benefits over decentralized rural electrification that is technically more efficient but less politically salient
• Domestic resource mobilization — most low-income countries have limited fiscal space and weak domestic capital markets, making them almost entirely dependent on external finance for large energy access programs

A range of instruments and mechanisms are being deployed to address these barriers:

• Blended finance — multilateral development banks and development finance institutions provide first-loss guarantees, concessional lending, and technical assistance that de-risk investments for private capital. The World Bank's Scaling Solar program has used this model to reduce solar tariffs in Zambia, Senegal, and other African markets
• Results-based financing (RBF) — programs that pay developers a per-connection subsidy upon verified electricity access, rather than up-front capital grants, align incentives with actual outcomes and are less susceptible to procurement inefficiency
• Currency risk mitigation — instruments like the USAID Development Credit Authority guarantee or the Africa Renewable Energy Fund's local currency financing facilities reduce the foreign exchange exposure that makes long-term energy investments in emerging markets unattractive to international investors
• Green climate finance reform — reforming multilateral development bank capital adequacy rules and leverage ratios could unlock trillions in additional financing capacity for climate and development investments without requiring additional government contributions

Beyond instruments, there is a fundamental political economy challenge: the 675 million people without electricity are among the least politically influential in their societies and virtually invisible to international financial institutions and governments. Their energy justice claims must be made by others — by civil society, by researchers, by political champions who understand that poverty reduction at the scale the SDGs demand requires treating energy access as the foundational investment it is, not a residual priority after conventional infrastructure has been funded. The financing gap is real, but it is also a choice — a reflection of how global systems currently prioritize returns over rights.

What Actions Can Governments Businesses and Individuals Take to End Energy Poverty

Ending energy poverty by 2030 — or closing much of the gap within a decade — is achievable. It requires no technological breakthroughs, only the deployment and financing of technologies that already work. The barrier is not capability but coordination and commitment. Governments, businesses, and individuals each have a role to play, and the collective action problem is solvable with the right combination of policy, investment, and advocacy.

Governments in developing countries can:

• Develop national electrification plans with geospatial technology allocation — assigning each unelectrified community to its least-cost technology (grid, mini-grid, or standalone solar) and publishing transparent implementation timelines
• Create regulatory frameworks for mini-grids that allow cost-reflective tariffs, protect operators from uncompensated grid arrival, and provide results-based subsidies for serving the poorest communities
• Reform household energy subsidies to channel support toward clean fuels (LPG, electric cooking) rather than fossil fuels that disproportionately benefit wealthier households
• Mandate local content and gender inclusion requirements in energy access programs to maximize the domestic development dividend from electrification investment

International institutions and donor governments can:

• Fulfill climate finance commitments and direct a meaningful share of the $100 billion annual climate finance target toward energy access in least-developed countries
• Reform multilateral development bank capital adequacy rules to dramatically increase lending capacity for clean energy in developing nations
• Support results-based financing facilities that pay per connection, per clean cooking adoption, and per verified impact rather than per project approved
• Fund geospatial electrification planning assistance so that low-income governments can make evidence-based investment decisions rather than defaulting to politically visible but economically suboptimal approaches

Businesses and investors can:

• Deploy commercial capital into blended finance vehicles that provide risk-adjusted returns while funding energy access in frontier markets
• Support pay-as-you-go solar companies and clean cooking enterprises with venture capital and growth equity that builds the private sector infrastructure for last-mile distribution
• Commit supply chains to responsible mineral sourcing for solar panels and batteries, ensuring the clean energy transition does not create new human rights violations in mining
• Advocate within industry associations and policy forums for the regulatory and institutional reforms that expand energy access markets

Individuals can:

• Support organizations working on energy access — from the Clean Cooking Alliance to country-specific programs like IDCOL or the Rural Electrification Agency of Nigeria — through donations or advocacy
• Invest in green bonds and ESG funds that include energy access as an explicit criterion, directing capital toward the projects and companies doing this work
• Advocate to elected representatives and international leaders for adequate climate finance flows to the least-developed countries, framing energy access as the human rights and development issue it is

The moral arithmetic is stark. Ending electricity poverty for the remaining 675 million people would cost approximately $35 billion per year for five years — less than 2% of global military spending, less than 0.5% of the fossil fuel subsidies the world pays annually. The convergence of poverty and climate change in the energy access crisis means that financing the clean energy transition in the developing world is simultaneously the cheapest, most impactful, and most urgent investment humanity can make in its own future. The question is not whether we can afford it. It is whether we will choose to.