Decentralised rural electrification: is easing market restrictions enough ?

For many of the experts at the World Bank meeting, decentralised rural electrification amounted to marketing photovoltaic kits for lighting or perhaps for television. The philosophy behind this approach is one of hard-line liberalism: the intervention of the authorities must limit itself to putting in place sales training, maintenance and management, getting rid of import duties, and creating credit bodies in rural areas.
Without challenging the validity of this type of intervention, ADEME nonetheless believes the approach to be largely insufficient. Its own approach aims to be global, organised and pragmatic. Rural electrification can come about through having an extension to the grid, village power plants with mini distribution networks or having individual electrification for each dwelling. The choice between the three should be made according to economic rationality based on such criteria as the distance from the network, the level of energy consumption and how the consumption sites are spread out.

The next choice would be the energy source which could be renewable (solar, wind, small hydroelectric power plants, etc.) or diesel, depending on existing local resources and once again on consumption levels. Once the areas have been established according to electrification type and energy source, the State should define the role of the different players, electricity companies, private specialised operators and village associations, as well as the economic conditions that will govern the implementation. Rural electrification, whether decentralised or centralised, is a deferred, low profit process, in so far as we do not limit ourselves to providing electricity for the well-off, and if we want to propose tariffs that will be accessible to the greatest number of people.
It therefore requires balancing out mechanisms that will ensure solidarity between rural areas and urban areas. On the other hand, if this special financing has to cover part of the initial costs then it is essential that the operating costs are entirely met by users if we want to perpetuate programmes and mobilise the private sector. These principles, which were already laid down at the Marrakech seminar in 1995, are more pertinent today than ever.

Jean-Louis Bal
Deputy Director of Renewable
Energies and Buildings