Impacts of energy efficiency projects in developing countries: Evidence from a spatial difference-in-differences analysis in Malawi

Abstract

Spatial difference-in-differences analysis is used to study the impacts of a large-scale development intervention aimed at improving energy efficiency in Malawi. The study proposes a quasi-experimental approach that compares the changes in several outcomes of interest over time between a population that benefitted from the program (the “treated” group) and a population that did not (the “control” group). Evidence for the analysis was primarily obtained from publicly available national household survey data and nighttime lights data. Results suggest that a combination of demand-side and supply-side interventions was associated with a statistically significant increase in electricity access, a decrease in the frequency of blackouts, and a switch from traditional fuels to electricity as the main source of energy for lighting (but not for cooking). At the same time, no evidence was found suggesting that the intervention caused households to pay more for electricity. The results are consistent with an emerging view in the literature that there are synergies between energy efficiency and energy access, especially in places where the bottleneck to wider electricity access is limited electricity generation capacity rather than the cost of connecting more clients to the grid.