The Modern Energy Minimum: The case for a new global electricity consumption threshold

Energy is fundamental to modern living and any competitive prosperous economy. SDG7 calls for modern energy for all, but the indicator for tracking progress against this goal is meeting a very low level of residential electricity consumption. We identify five empirical facts about electricity and global development: (1) no high income country is low energy, (2) income and electricity consumption are tightly correlated across time and space, (3) the current threshold used to define modern energy access is too low, (4) the current definition fails to capture consumption outside the home, where the majority of electricity is used, and (5) sufficient energy consumption is a necessary input to economic activity everywhere while its absence is a binding constraint on income and development.

Based on these empirical facts, we propose a new Modern Energy Minimum of 1,000 kWh per person per year, inclusive of both household and non-household electricity consumption. This level tightly correlates with an average income of about $2,500 per year, roughly the midpoint for lower-middle income status. We also suggest how this new metric could be measured with limited additional data collection. The Modern Energy Minimum provides a more ambitious energy target better aligned with historical trends and development aspirations for employment, higher incomes, prosperity, and economic transformation. This new indicator could be adopted by an international body and used to better track progress for the next iteration of SDG7.