The last-mile connection paradox: Power outages, demand-side barriers and household electrification decisions—Implications on energy poverty

Abstract

Despite the expansion of electrification in Africa, a substantial gap persists between grid access and the actual uptake of the grid. This raises a policy-relevant question: why do households in grid-accessible areas remain unconnected? This study examines the combined role of power outages and demand-side factors on households' grid-connection and post-electrification decisions and their implications on energy poverty. Leveraging a rich panel survey dataset from Ethiopia, we first conduct a simple demand-supply decomposition analysis to assess their relative contributions to the observed grid access gap. The results reveal that demand-side constraints appear to be equally important as supply-side issues, accounting for more than one-fourth of the overall grid shortfall. Further, the findings from the Random Effects ordered logistic regression model indicate that frequent and prolonged power outages, income poverty, and lack of schooling play a significant role in deterring the optimal electrification choices of households, thereby perpetuating multidimensional energy poverty. The effects of power outages also vary across different income groups and education levels. Hence, providing households with the opportunity to connect alone is not enough to assure high rates of grid-uptake, and realize the expected gains of electricity. Enhancing grid reliability and addressing the underlying barriers on the demand side is quite essential at every stage of the electrification process.