IEEE Power & Energy Magazine - July/August 2014 - 30

Rural Minigrid 21%

Rural Offgrid 7%
Rural Grid 12%
Urban Grid 60%

figure 2. Universal electrification and expected share of
connections by type; the total number of new connections
needed is 550 million (source: Electra 259).

individual electricity needs. as well-being increases, however, so does electricity demand, so that a more powerful
electricity supply will be needed after a certain period of
time. To achieve universal access to electricity, all available
technical options will be needed, including conventional
grids, minigrids, and off-grid solutions (including shss).
To achieve universal access by 2030, it is estimated that
in the period 2010-2030 some 550 million households need
to be provided with electricity services; this figure takes into
account expected population growth to 2030. some 60% (330
million) of the new connections will be needed in urban areas,
and 40% (220 million) must be installed in rural areas. it is
probable that all urban connections will be grid based, while
for rural areas about one-third (66 million) of the household
connections will be grid based. minigrid-based connections
are expected to be made for another 116 million households,
while 38 million off-grid connections are also expected (see
figure 2). estimates of the number of minigrid-based power
systems needed to achieve global electrification range from
95,000 minigrid-based systems of approximately 300 kW to
400,000 systems of approximately 70 kW, depending on the
number of villagers connected.
for these 550 million households to be electrified by
2030, an investment of approximately Us$700 billion
(including generation, transmission, and distribution) is
needed. in arriving at this figure, it is assumed that off-grid
systems cost on average Us$800 per household; grid-based
electrification in remote communities cost Us$2,000 per
connection; and minigrid, urban grid, and off-grid options
cost Us$1,200 per household connection.
The amount of Us$700 billion needed to achieve universal access may seem extraordinary, but putting it in the
context of the global power system reveals another picture.
The iea estimates that between 2010 and 2035, cumulative
global power sector investments of Us$16.6 trillion (in 2009
dollars) will be needed to meet the expected growth in electricity demand and to replace obsolete infrastructure. With
an outlay of Us$700 billion, universal access to electricity
for households and small enterprises accounts for only just
over 4% of the total investments needed in the global power
sector to 2035.
30

ieee power & energy magazine

Lessons Learned from Rural
Electrification Programs
during the past few decades, a number of studies and surveys have been carried out to identify and assess relevant
developments and trends as regards large, utility-scale rural
electrification programs in both the industrialized and developing world. The results were translated into critical success
factors and recommendations for decision makers.
a general conclusion that has emerged is that supplying
rural electricity has always been considerably more expensive
than supplying urban areas and, as a consequence, national
utilities have been reluctant to extend service to rural areas.
in nearly all countries, affordable electrification was only
achieved through special national programs and financing
arrangements. government subsidies of up to 50% have often
been given towards the initial investments, and long-term,
low-interest, or interest-free loans have often been provided
to finance the necessary electrical infrastructure. The customer base is mixed but requires special attention because of
the issue of affordability for the economically disadvantaged
and the needs and opportunities of small-scale industries. in
general, private organizations have not been very interested
in rural electrification because of the high risks and the low
rate of return, which is often 10% or less.
if the principle of "the customer pays the real costs" were
to be generally applied, the poorest among the rural population in particular would be unable to use electricity despite
the fact that they usually consume a very limited number of
units (as few as 10 kWh per month) and could afford to pay
for their consumption by means of a lifeline rate.
it is also fair to conclude that at the national level, politicians have, in most cases, been far from proactive. The
power of lobbies and pressure groups has probably been a
larger determinant as regards rural electrification. in many
countries, the rural population had to rise up against neglect
before any actions having to do with the electrification of
their areas were taken. in general, the political leverage of
the rural population in developing countries is low, and this
underlines the importance of a proactive and worldwide
approach to the problems that rural communities in the
developing world face.
in many countries, a national or provincial power utility
was considered to be the appropriate entity for development,
in order to avoid municipal boundaries' hampering the development of an economically justified electricity infrastructure
and to achieve an acceptable area of coverage and sufficient
uniformity of tariffs. in quite a few countries, cooperatives
have been successful, but success seems to be linked to specific contexts and cultures and to the opportunities available
for technical, administrative, and managerial support.
The experience in many countries shows that the performance of government-owned utilities can be satisfactory,
provided they are able to operate at arm's length from the politicians and are reasonably autonomous. such organizations have
established and maintained a reliable and affordable electricity
july/august 2014



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IEEE Power & Energy Magazine - July/August 2014 - Cover3
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