Main decision criteria
- Distance to the national / centralised grid (incl. capacity of grid)
- Demand
- Population density
- Long-term demand (in kwh and terms of energy services)
- Levelized costs of energy production in centralised grid and extension costs
- Levelized costs of energy production in isolated system
- The selection of socially and environmentally appropriate technoligies
- ...
Acknowledgement
Many experts and practitioners have already contributed to this discussion. It is however important that the discussion continues and that this wiki grows with the experience gathered in the field.
The core elements of this article are retrieved from discussions with Robert van der Plas and Harald Olk.
The main source for the criteria and the rules of thumb is an excellent publication by NORAD: ....
Important considarations
A sustainable rural electrification project depends on a number of critical planning decisions. Important factors in project planning and design are the choice of appropriate technology, ensuring institutional and economic viability, safeguarding of social and environmental issues, and optimizing productive uses of electricity.
In the following paragraphs several rules of thumbs (ROT) will be developed on the basis of cost criteria and experience made in numerous rural electrification projects. They can be used only as a pre-assessment in a preliminary phase and more thorough analysis is needed.
Rules of thumb can only give a general orientation. However, there does not exist a single way for rural electrification, each site and situation is different. Rules of thumb do not prevent project developers and decision makers from conducting a regular feasibility study that evaluates at least two options and that takes into account all relevant ecological, economical and social factors in the specific project environment.
The key for success and sustainability is ownership amongst all involved parties including the stakeholders and the last consumer. It is therefore important to evaluate and assess each individual project thoroughly.
Grid vs off-grid vs evolutionary approach
Until population densities and/or urbanization rates increase considerably, grid extension is not likely to be cost-effective for providing access to electricity for a large part of the population – and will therefore not happen naturally unless large subsidies are provided. Even then, lower cost but modern alternatives could more quickly provide adapted solutions that could be quite different for different beneficiaries. These specific solutions are likely to change over time, reflecting changing economic conditions in the area and/or the beneficiary, effectively setting in motion a process whereby individual households, institutions, or firms follow their own path towards ever increasing modern energy service levels and lower costs of service.
Decentralized solutions are pursued by governments outside of grid areas, either on an individual basis (i.e., for individual consumers) or for a distinct group of beneficiaries (such as an isolated village with a mini grid). PV solar home systems, PV lanterns, solar dryers and productive uses based on PV are among the frequently promoted individual solutions.
When households desire more services than individual PV systems or PV lanterns can provide, mini grids can become a viable solution. Such mini grids can supply electricity from a variety of energy sources. Mini grids using diesel generators can provide high quality, high cost electricity quickly; however, high operational costs often result in reduced service delivery, such as supply during a few hours per day only. Mini grids supplied from micro hydro plants can provide lower-cost electricity, particularly when located in areas with substantial rainfall and rivers; however, some specific technical skills are required, investment costs are relatively high, and particularly local management and ownership require special attention. The costs of PV mini grids will continue to decrease.
The use of electricity is almost addictive; once available, demand appears to be always increasing and never decreasing. This works in favour of utilities, since the more electricity clients use, the easier it will be for them to supply at reasonable costs (network externalities, synchronous services etc.). As soon as households obtained access to electricity, they have thereby started a path that is likely to lead to higher energy consumption for a long time to come. As and when the demand supplied by mini grids grows, eventually interconnection between them is likely to become viable. The inter connection with the national electricity grid is the next conceptual step than might occur in the future. The same concept also holds for individual solutions, e.g. more PV modules can be added to an existing system, or more turbines, generators to an existing plant.
The concept allows for non-static (or evolutionary) approaches, in many cases it is feasible to follow the above approach of electrification: from stand-alone solutions to mini grids, interconnecting the mini grids, etc. However, as technology improves and gets cheaper, one can imagine that there are circumstances under which grid-based solutions are no longer necessarily the final and most modern solution. The day might come that the grid is no longer needed if one were to boil water but that a PV system can do the same job at affordable costs. Mini grids and sometimes even appropriate stand-alone solutions could deliver reliable and sufficient supply in the medium and long run in those areas where grid is neither a cost-effective solution nor a realistic approach.
It is more appropriate to promote evolving solutions rather than a final solution as the starting point – as has been and still is common practice. At any point in time, rural and peri-urban households, institutions, and private firms have then access to solutions that fit their needs and their wallets of that moment; these temporary solutions may then shift over time until the conditions are satisfied for grid-based supply to become attractive in the distant future. This is not a quest for rapidly extending electricity grid supply, but an attempt to focus more attention on solutions for those who will under no circumstances obtain grid electricity in the near to medium term future. It is evident that technological developments are progressing very fast (e.g. leap frogging) and network effects of (large integrated) grids can be ruled out for the foreseeable future by new generation and supply technologies, as well as new appliances (i.e. smart ICT). The evolutionary approach is not new for cooking solutions, whereby households tend to move up over time from inefficient firewood and charcoal, to efficient wood-based fuels, briquettes, to kerosene, and LPG.
Until now, the bulk of most countries’ electrification efforts have been to increase urban supplies and at best trying to replicate urban supply mechanisms in rural areas, leaving aside a few pilot projects to explore alternatives for use in rural areas. The time has come to state that this is no longer an adequate approach if the goal is modern energy access for the majority of the population within a reasonable time period.
A different approach is therefore needed, conceptually, chronologically and physically. Imagine electricity not to be the final solution in itself, but a means to improve the quality of life, and then it would be possible to improve rural living conditions fairly quickly for a large number of people. The idea is not new – Amory Lovins in the early 1990s already advocated this concept, but has not been applied on a significant scale.
Although the concept cannot be called traditional rural electrification, however, it is effectively the beginning of an era of modern services delivery that would be made possible by having at least access to some electricity; in other words, the beginning of the end of energy poverty. For many households, modern energy services will initially limited to the use of a television and/or modern lights, both of which will increase living conditions and may contribute to improved education, productivity gains, and/or accelerated economic development, but this will not make them attractive clients for a grid-based electricity utility. It is slowly trickling down in the minds of planners that rural electrification by grid extension may not be the most economical, technologically and developmentally appropriate solution for many geographical areas.
By the time the population has outgrown a particular service delivery level, incomes are likely to have risen and population densities increased, resulting in entirely different economic conditions under which other temporary solutions might now become feasible (such as added PV modules to the battery system at home, or mini grids connecting most village households). A grid-connected city person may find it difficult to imagine, but even the simplest first step up from kerosene lighting, a battery-based modern CFL or LED lamp, would immediately improve the quality of life for rural households. There are numerous options to improve living conditions without having grid electricity, and all have fairly low investment costs. Indeed, a range of individual alternatives should be promoted to improve the quality of rural life across the board and create wealth, to commensurate with households’ desire and ability to pay for such services. Although these services constitute a major step up from prevailing living conditions, several subsequent steps will still be required to reach comparable conditions in the future as in urban areas.
Development of criteria / rules of thumb