National Approaches to Electrification – Technology

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Technology: The physical means by which electricity is generated, transmitted and distributed

Grid-connected mini-grids and distribution systems  share characteristics with both Grid Extension and Isolated Mini-grids – They are linked to the grid system and are able to import electricity from and export electricity to it, so technically they have more in common with Grid Extension. However, in that they are owned and managed independently they are more similar to Isolated Mini-grids. These differences call for different policy and regulatory approaches, so a separate Technology category has been established.

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Grid Extension

Definition:

Establishment and extension to new users of a system that connects electricity generation plants to consumers via a transmission and distribution network across the country. Grid systems draw on a variety of generation sources, from nuclear and hydro-power to coal, oil and combined-cycle gas turbines and solar- and wind-power. Each form of generation has different characteristics in terms of flexibility, reliability and costs. A mix of generation sources is required to match generation to demand, with over-reliance on any one form of generation risking lengthy outages (for example, a drought can significantly affect a predominantly hydro-powered grid system). Technology advances, combined with environmental concerns, have led to an increasing focus over recent years on Renewable Energy based generation. Transmission and distribution system designs also vary, with low-cost distribution technologies such as Single Wire Earth return (SWER) being used to reduce costs in remote areas.

Internactions wiht other NAE Categories:

	Delivery Model	The national grid system may be publically or privately owned or combine both in a public-private partnership. Common public-private models for grid systems include: Publically owned generation and transmission, and privately owned distribution; Independent Power Producers (IPP) connected to a publically owned transmission/distribution system). (Where individual distribution areas are separately owned, eg by municipalities or regional bodies, these may be regarded as grid-connected distribution systems and are discussed under that category).
	Legual Basis	Grid systems almost always act as monopoly concessions (because of the need to balance demand and supply across the system in real-time, and the substantial investment required to establish and maintain the infrastructure). As a result, the right to transmit and sell electricity is often reserved to the national grid utility or company (at least within the area reached by the grid system).
	Price/Tariff Regulation	In line with the nature of the national grid as a single coherent system, uniform tariffs are almost invariably charged across the system (though often with different tariffs for different classes of user and levels of usage, or in some cases time-of-use pricing). Electricity prices are a highly political issue in almost every country, and therefore there is almost always some oversight of these tariffs. Without explicit regulation there is a risk of political pressure leading to tariffs which fail to cover costs, and hence system deterioration.
	Finance	Almost all national grid systems (including those in developed countries) are constructed using public funding, drawing on government funds sometimes supplemented by concessionary loans and grants from international agencies. Where the grid system is (wholly or partially) privately owned (often as the result of a privatisation process), private investment in infrastructure may be leveraged by subsidies (egfor connection charges). User charges are the other main source of grid system funding, and uniform tariffs mean that some element of cross-subsidy is inherent in grid-based electricity provision, with users who are more expensive to supply being subsidized by those who can be supplied more cheaply.
	Non-Financial Interventions	National energy planning is key to establishing the economically optimum extent of the grid. Institutional restructuring, regulatory reform and policy and target setting may all be beneficial in creating the institutional and policy basis for grid extension. Capacity building or technical assistance may be needed where the key actors involved in grid extension lack capacity. Technology development/adoption and adoption of appropriate technical standards can enable grid extension at lower cost (for instance in Tunisia where adoption of standards allowing MALT (Mise A La Terre) distribution lowered costs), while demand promotion may be needed to increase revenues and make it economically sustainable.

Grid-Connected Mini-Grids/Distributed System

Definition:

An electricity system connected to, but owned and/or separately managed from, the main grid system which supplies electricity to users within a local area.

Isolated Mini-Grids

Definition:

A system for generation and distribution of electricity to multiple users which is not connected to the main grid system.

Standalone Systems

Definition:

A system for generating and supplying electricity to a single user (separate from any distribution system).

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