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Energy Access a Primary Target for Economic Development

This is the first article in the "Rural Electrification" series contributed by the Alliance for Rural Electrification, an international business association that provides efficient renewable solutions for rural electrification in developing countries.

According to the International Energy Agency , 1.5 billion people, or 22% of the world’s population, are without access to electricity, 85% of which are in rural areas.  In particular, the figures are bleak for Africa and South Asia.  The continent of Africa has only achieved energy access for 29% of its population, yet the population continues to quickly rise.  However, South Asia, in spite of impressive progress (more than 200 million people received access during the last decade), still represents the largest group of people without electricity in the world. Researchers enjoy comparing China and India, but the difference here is striking: according to the International Energy Association as of 2008, 99.4% of Chinese have access to electricity, with 8 million remaining without power.  In India, 64.5% have access to electricity with 404.5 million remaining without power, mostly in rural areas.

   Table 1: Regional Access to Electricity, as in the World Energy Outlook

Why Renewables?
The volatility of oil prices, local and global environmental constraints, together with rising world fossil fuel demand increases the need to find and utilise alternative and efficient energy solutions. Furthermore, the elevated operation and maintenance costs, the geographical difficulties of fuel delivery, and the environmental and noise pollution present further disadvantages to the exclusive use of diesel-based systems.

Encouraging renewable energy development is one of the most efficient and practical options for electrification in the rural developing world. The low operation and maintenance costs of renewable energy power systems offset the initial capital costs, which makes them more efficient and cost competitive solutions. Renewable solutions offer energy independence and security as well as the inherent environmental benefits of using clean and sustainable solutions. However, in the case of India, providing 1 billion plus people with a constant energy supply is very difficult, especially for a developing country facing rising gas prices. Erratic voltage levels and an unreliable power supply are major problems, due to the inadequate energy supply and ageing transmission leading to power cuts3. Rural areas face serious problems with the reliability of power supply.

Electricity for Poverty Elimination
According to Dr. Rajendra K. Pachauri, the Chairman of the Intergovernmental Panel on Climate Change (IPCC), the enormous increase in oil prices leaves out the poorest people from energy access, and the burden is quite unbearable.  As a result, a large proportion of the developing world remains without any access to modern energy. Overcoming poverty requires self sustained economic growth. Electricity is essential for setting up small businesses, which serve the local market. Sustained employment is the only means of lifting people out of poverty, which is why electricity is a key to development. 

    Table 2: Use of Electricity in Rural Areas

The Alliance for Rural Electrification
AREThe Alliance for Rural Electrification (ARE) represents companies and organisations which share the view that rural communities in developing countries have an alternative to traditional electrification and conventional energies. Renewable energy technologies, utilised in off-grid and mini-grid power systems, can sustainably meet the energy needs of rural communities at an affordable price.

Due to low potential electricity demand and economic development in these areas, grid extension is often not a cost competitive option. A study of the World Bank on rural electrification programs placed the average cost of grid extension per km at between $8,000 and $10,000, rising to around $22,000 in difficult terrains. Many projects have demonstrated that decentralised renewables are a more reliable electricity resource than grid connectivity due to the overstretched and unreliable capacity of central systems.

Another central issue is the role of the private sector. ARE believes that private companies can become a key driver in the field of rural electrification. Many companies have now demonstrated their capabilities by implementing successful rural renewable energy projects throughout the world. However, a crucial precondition is an enabling legal and financial framework.

ARE serves as an international platform for sharing the knowledge and experience of the private sector interested in operating in developing countries. It develops technological and financial solutions, which are made available for policy makers and other actors in the field of rural electrification. Development policy is increasingly discovering the benefits of renewable technologies and acknowledging that the private sector has an important role to play. Now this has to be translated into concrete policies, which boost private sector driven off-grid renewable rural electrification.

Reliable, cost effective and sustainable energy solutions exist and are being implemented every day worldwide. Renewables can provide enough sustainable, reliable, clean electricity to support the creation of local business in large population areas, whilst also being able to reach the most dispersed rural communities. Renewables can also provide unlimited solutions for accessing the water needed for irrigation and sanitation, in places that have consistently been deprived of this right, and at the same time, offer new opportunities for public health and education. The benefits of electricity are enormous; quality of life improves as socio­economic issues such as infant mortality, illiteracy, life expectancy, and total fertility rate improve with access to energy . Thus, electricity is a prerequisite for economic development, not a result.

Today, when the right conditions are put in place, the technology to provide energy for everyone exists. When renewable energy technologies are politically supported they can reach people faster and achieve more than any other technology or master plan, in addition to preserving the current state of our ecosystem.

The authors Simon Rolland and Aneri Patel work for Alliance for Rural Electrification. The next article in this series will focus on different renewable energy technologies available and options/mix that works best for rural electrification. 


2. International Energy Agency, World Energy Outlook 2010.
3. Bakshi, Rakesh. "Development of Renewable Energy in India: an Industry Perspective." Renewable Energy Policy and Politics: a Handbook for Decision-Making. Ed. Karl Mellon. London: Earthscan, 2006.
4. 14th United Nations Commission for Sustainable Development, New York City, USA 2006.
5. Ravindranath, N.h., K. Rao, Bhaskar Natarajan,  and Pradeep Monga. Renewable Energy and Environment: a Policy Analysis for India. New Delhi: Tata McGraw-Hill Company Limited, 2000. 1-208. 
Image(s) Courtesy:
Alliance for Rural Electrification
Living Off Grid