Household energy demand in Uganda

Abstract

The study analyzed determinants of household fuel energy access and levels of use efficiency using Uganda National Panel Survey data of 2009-2016. Two econometric approaches were used to examine energy access and energy use efficiency namely; the Random Effects Probit and Random Effects Stochastic Frontier models. Results provided evidence that the energy ladder hypothesis was applicable though fuel stacking theory was the dominant phenomenon. Whereas a 1 percent increase in household income decreased the probability of using traditional fuels by 4.1 percent among the lowest income category and 7.9 percent among the highest income category, the rate was 1 percent and 8.6 percent increase in use of modern energy among the lowest and highest income categories respectively. Ownership of a permanent dwelling, level of education, and proximity to grid electricity significantly influenced access to clean energy by 2.1, 0.17, and 12.8 percentage points whereas firewood use was decreased by 2.5, 0.007, and 9.4 percentage points respectively. The rural and urban households’ access to clean energy differed largely in magnitude. The Eastern region of Uganda was found to be the most unlikely to access clean energy relative to the Central region. Household energy use in Uganda was largely inefficient. Electricity, charcoal, and firewood consumption inefficiency was 27.4, 35.2, and 38.8 percent respectively. The major influencing factors of levels of fuel energy use efficiency in all the models were household income, own prices, household size, higher levels of education, permanent dwellings whether owned or rented, and use value of the fuel. There were also significant urban-rural and regional differences in fuel energy use efficiency. The policy recommendations include support for households to purchase affordable clean energy in form of a price subsidy and improving the capacity of households to earn high incomes such that construction of permanent residences is encouraged for clean energy uptake. Lowering the cost of construction materials and access to low cost housing finance capital are also recommended.