The role of demand-side subsidies in ensuring a just energy sector transformation: scalable solutions for accelerating universal energy access beyond the grid (RVO, GIZ, End-User Subsidy Lab members (WB/ESMAP, GOGLA, Clean Cooking Alliance), Netherlands Ministry of Foreign Affairs)

To achieve universal energy access in a fair and just manner scalable solutions are needed. Demand-Side Subsidies (DSS) are an indispensable tool towards fulfilling SDG7 and leaving no one behind (LNOB). DSS are targeted subsidies meant to translate into price reductions so the poorest can afford modern energy solutions. DSS mechanisms, when well-designed, can be cost-effective, minimize market distortion, and complement and bolster other interventions to ensure no one is left behind in the energy transition. However, knowledge of and experience with DSS for off-grid energy access is limited to date. To contribute to the energy sector transformation the End-User Subsidy Lab developed a design framework, while Energising Development – a member of the lab – is piloting innovative, scalable DSS mechanisms. The pilots focus on low-income and/or displaced populations who are currently unable to access commercial off-grid solar and cooking markets. This event provides a space to dive into the subsidy design elements, as well as practical application related to targeting mechanisms and avoiding market distortion.