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Energy poverty reduction by fuel switching. Impact evaluation of the LPG conversion program in Indonesia

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  • Andadari, Roos Kities
  • Mulder, Peter
  • Rietveld, Piet

Abstract

In low- and middle-income countries, Liquefied Petroleum Gas (LPG) can be an attractive alternative to the widespread use of traditional kerosene. Not only is LPG a relatively clean, safe and cost-effective fuel for households, its large-scale adoption also reduces the heavy burden of kerosene consumption subsidies on government budgets. Against this background, we evaluate the impact of a large government program to substitute LPG for kerosene in Indonesia. Using a household survey across urban, suburban and rural regions we find that this program was very effective in causing a large scale shift from kerosene to LPG. This shift was positively influenced by level of education, household size and household income. Contradicting the energy-ladder model, the LPG program, reinforced by an increase in the price of kerosene, led to increased stacking of fuels, including increasing consumption of both electricity and traditional biomass. In addition, our analysis shows that the LPG program failed to substantially reduce the overall number of energy-poor people, but it has been effective in alleviating extreme energy-poverty. Finally, we find that medium and higher income households in suburban areas benefitted most from the LPG program.

Suggested Citation

  • Andadari, Roos Kities & Mulder, Peter & Rietveld, Piet, 2014. "Energy poverty reduction by fuel switching. Impact evaluation of the LPG conversion program in Indonesia," Energy Policy, Elsevier, vol. 66(C), pages 436-449.
  • Handle: RePEc:eee:enepol:v:66:y:2014:i:c:p:436-449
    DOI: 10.1016/j.enpol.2013.11.021
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    4. Lee, Soo Min & Kim, Yeon-Su & Jaung, Wanggi & Latifah, Sitti & Afifi, Mansur & Fisher, Larry A., 2015. "Forests, fuelwood and livelihoods—energy transition patterns in eastern Indonesia," Energy Policy, Elsevier, vol. 85(C), pages 61-70.
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    9. Zubi, Ghassan & Fracastoro, Gian Vincenzo & Lujano-Rojas, Juan M. & El Bakari, Khalil & Andrews, David, 2019. "The unlocked potential of solar home systems; an effective way to overcome domestic energy poverty in developing regions," Renewable Energy, Elsevier, vol. 132(C), pages 1425-1435.
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    11. Aggarwal, Shubham & Kumar, Sudhanshu & Tiwari, Manoj Kumar, 2018. "Decision support system for Pradhan Mantri Ujjwala Yojana," Energy Policy, Elsevier, vol. 118(C), pages 455-461.
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    13. Malla, Sunil & Timilsina, Govinda R, 2014. "Household cooking fuel choice and adoption of improved cookstoves in developing countries : a review," Policy Research Working Paper Series 6903, The World Bank.
    14. Jean Hugues Nlom & Aziz A. Karimov, 2015. "Modeling Fuel Choice among Households in Northern Cameroon," Sustainability, MDPI, Open Access Journal, vol. 7(8), pages 1-11, July.
    15. Sutar, Kailasnath B. & Kohli, Sangeeta & Ravi, M.R. & Ray, Anjan, 2015. "Biomass cookstoves: A review of technical aspects," Renewable and Sustainable Energy Reviews, Elsevier, vol. 41(C), pages 1128-1166.
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    17. Tushar Bharati & Yiwei Qian & Jeonghwan Yun, 2020. "Fueling the Engines of Liberation with Cleaner Cooking Fuel," Economics Discussion / Working Papers 20-03, The University of Western Australia, Department of Economics.
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    19. Gould, Carlos F. & Schlesinger, Samuel B. & Molina, Emilio & Bejarano, M. Lorena & Valarezo, Alfredo & Jack, Darby W., 2020. "Household fuel mixes in peri-urban and rural Ecuador: Explaining the context of LPG, patterns of continued firewood use, and the challenges of induction cooking," Energy Policy, Elsevier, vol. 136(C).

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