Expanding Electricity Access to Remote Areas: Off-Grid Rural Electrification in Developing Countries

Development: The World Bank Group’s mission is to work for a world without poverty. An important part of this mission is expanding access to modern energy services for an estimated two billion people who still lack such services (World Bank 1996, ESMAP 2000c). Expanded access to energy services is inexorably linked to today’s transforming energy sector. Although ongoing reforms are showing success and being replicated, there is growing concern about their social and environmental sustainability. In developing countries, the concern is twofold: how to derive the most benefit from a liberalised and unbundled energy sector while ensuring environmental sustainability and improving access for the poor. Lack of access to energy in rural areas is of same order of magnitude as lack of access to other types of infrastructure. In fact, it is often the same rural or urban poor who lack access to modern energy services, electricity, modern telecommunications, clean water and other basic services. This interdependency is obviously part of the problem (high service costs versus low ability to pay due to low income), but may also be part of future solutions: the potential of bundling services on a local demand side basis is just recently being (re)discovered for development. In this chapter, we look at a special case of access to energy: off-grid rural electrification in developing countries. Some of the rural energy users (households, productive and public uses) will be served by grid connections during the next decade, (see Box 1 for the potential social benefits of rural electricification). But large numbers will remain unconnected because of the high costs of grid extension when serving new loads. Off-grid electrification can provide an alternative solution for many low-demand users at lower cost than grid extension and a growing market niche for small types of rural energyservice companies. Costs of off-grid technologies have come down significantly over the last years. Options for Off-Grid Rural Electrification & Technology Choice Off-grid grid rural electrification can provide power for domestic uses (lighting, cooling, TV, radio, communication), productive uses (e.g., water pumping, fencing, cooling, mills, sewing machines, etc) and public uses (e.g., schools, health stations, police stations). Power may be supplied through two basic distribution options: village minigrids (serving tens or hundreds of users) or isolated systems (serving just one or two users). And power may be generated from a variety of resources, using diesel-, biomass-, wind-, PV-, or small hydro-generators, or hybrid combinations of these. Depending on the characteristics of a specific use (i.e. willingness to pay and load profile) and the local supply options, the least cost solution for a rural off-grid system may consist of any combination of the above options (see Box 2). Three typical types of off-grid service provision systems are described below (Foley 1995; Fraunhofer 1995; World Bank 1996).