Is renewable energy shrinking or widening the gap between the wealthy and the poor?

Our PhD student Ha-Chi Le is focusing on addressing energy poverty.

January 16 2024

Do all Australian households have equal access to cheaper renewable energy sources such as rooftop solar panels? No, says Monash Business School PhD student Ha-Chi Le, who is developing a new “energy poverty” measure that promises to show who is benefiting the most from the shift away from fossil fuels.

Energy poverty is defined by the World Economic Forum as a lack of access to sustainable modern energy services and products, which forces households to reduce their energy consumption to the point where their health and wellbeing suffers.

Who actually benefits from renewable energy in Australia?

Ms Le’s research focuses on the role of sustainable communities in addressing energy poverty. She examines the impact of social capital on renewable energy uptake in Australia, using rooftop solar panel installations as a key indicator of sustainable initiatives, and analysing postcode-level data from the Australian government and the Melbourne Institute.

This way, her study probes access to, and affordability of, these new energy sources.

“There is a possibility that the already wealthy households who switch to solar panels can consume even more energy - and that more efficient renewable energy sources don’t really help the poor,” Ms Le said.

“I’m keen to find whether sustainability initiatives within the community, such as installing rooftop solar panels have alleviated energy hardship in an inclusive manner, or just for wealthy households,” she said.

She is exploring the affordability of energy bills for different Australian income and ethnic groups, whether the share of income on electricity bills has increased over time, and the dynamics of changes over time both for peak and off-peak seasons.

What can history teach us about the renewable energy revolution?

Meeting the UN’s net-zero global emissions target by 2050 requires a complete transformation in how we use energy in our daily lives.

In Australia, swift rollouts of wind and solar power, energy transmission and storage, and electric vehicles are underway to phase out fossil fuels. And Ms Le’s research is beginning to reveal detailed effects of the energy revolution on human life.

In her thesis, Ms Le also probes historic data spanning 150 years from OECD countries to evaluate the links between human wellbeing and energy consumption. The data encompasses multiple economic cycles and numerous shocks including the Great Depression, the two world wars and the recent Global Financial Crisis.

"Ms Le establishes that ... research and development will play a key role in ... reducing energy poverty in the long run"

“It’s not only about the amount of energy you consume, but whether this energy consumption will make your life better or worse in these countries when it comes to explaining life expectancy and wellbeing,” Ms Le said.

Her findings reflect that international agreements, like the UN’s Kyoto Protocol and the Paris Agreement, boost economic growth by reducing energy intensity in OECD countries. The historical data also shows technological and financial development lessens the strain of energy consumption on human wellbeing.

Ms Chi also analyses the impact of energy research and development on energy consumption in OECD countries.

How can we keep energy affordable and accessible?

One of her supervisors, Dr Mita Bhattacharya, from Monash Business School’s Department of Economics, said Ms Le’s research indicated Australia needs to learn from the OECD bloc.

“To achieve sustainable development we need to reduce energy poverty and increase wellbeing. Addressing the inequitable cost structure across different consumer groups and reducing regulations will help to increase market participation,” Dr Bhattacharya said.

“Utilising country specific and cross-country data, Ms Le establishes that the role of research and development will play a key role in maintaining energy prices and reducing energy poverty in the long run,” Dr Bhattacharya said.

Ms Le said her supervisors, Dr Bhattacharya and Prof Russell Smyth from the Department of Economics and Professor Xibin Zhang from the Department of Econometrics and Business Statistics, had enabled her to access large international historical datasets, as well as micro- level Australian household data.

“I’ve received so much advice and support from my supervisors at Monash Business School. I’ve learned new statistical tools and econometric frameworks in particular in handling both macro and micro level data,” Ms Le said.

Ms Le said since joining Monash, her academic focus had shifted from development economics as an undergraduate at Nanyang Technological University in Singapore, to the energy sector and its direct impact on individuals, industries and economies.

“Monash provides an excellent supportive environment to PhD students in all aspects - I am enjoying every day at Monash.”