Sustainable Energy Handbook
Module 5.1
Rural Electrification
Published in February 2016
1 General Introduction
According to the International Energy Agency’s Africa Energy Outlook 2014, 620 million people in
Sub-Saharan Africa do not have access to electricity or remain un-electrified due to poor quality of
the grid. This is nearly half of the 1.3 billion un-electrified people in the World. Overall, the electricity
access rate for sub-Saharan Africa has improved from 23% in 2000 to 32% in 2012.
Nearly 80% of those lacking access to electricity across sub-Saharan Africa are in rural areas, an
important distinction when considering appropriate energy access strategies and technical
solutions.
In April 2012, President Barroso took the commitment in the framework of the Sustainable energy
initiative (SE4ALL) to provide access to sustainable energy for an additional 500 million people in
developing countries by 2030. Rural electrification is therefore a key sector of intervention for
DEVCO in the energy area. The Operational handbook has been prepared to help EU staff, based in
delegations or at headquarters, to follow up new sustainable energy projects as well as policies.
2 General principles
Rural electrification is the process of bringing electrical power to rural and remote areas. Electricity
is used not only for lighting and household purposes, but it also allows for mechanization of farming
operations, such as threshing, milking, and hoisting grain for storage. In areas facing labour
shortages, this allows for greater productivity at reduced cost.
A rural area is a geographic area that is located outside cities and towns. The word "rural"
encompasses all population, housing, and territory not included within an urban area. Whatever is
not urban is considered rural. Rural areas are characterised by their remoteness and low population
density as well as a high level poverty. This implies that most of the time the demand for electricity
is low and the financial profitability of electricity supply services is not ensured. (Key average
numbers for rural households in Sub Saharan Africa (SSA): 150-250W/household; 50-70kWh/month;
150-300$ income/month).
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Sustainable Energy Handbook – Module 5.1. Rural Electrification
Rural electrification can be implemented through the 3 following options as shown in the next
figure:
Grid Off-Grid
33 kV Perimeter Perimeter
Distribution
Off-Grid
Perimeter 100 kV Biomass
Transmission
MG
Stand-alone
> X pop
Systems
Justified by high
population
Solar/wind
MG
Hydro
MG
Figure 1 : Illustrative view of On-Grid and Off-Grid perimeters (DFID-IED, 2013)
On-Grid rural electrification: refers to the extension of electricity distribution to rural areas through
an electricity grid. Grid connexion is the most expected solution as it is supposed to provide more
power and energy to the customers at a lower price. But rural electricity connections are more costly
to construct than urban connections because the customers are scattered over a wide area, access is
more difficult and the consumption usually is much lower – less than 1000 kWh per year. (cf.
Handbook module on-grid rural electrification).
Off-grid mini-grid: Mini-grid refers to a system where all or a portion of the produced electricity is
fed into a small isolated distribution grid (LV/MV; single-/tri-phases) which provides several end-
users with electricity. The off-grid 1 attribute indicates that the mini-grid is isolated from the main
grid (typically more than 5-20km), supplied by independent source(s) of power (fuel- or renewables-
based), and operated by national utility or any other operator. The power range for a mini-grid is
from 10 kW to several MW. Off-grid interventions help population in remote areas to get on the
energy ladder on a time scale that accelerates impact. (cf. Handbook module on rural electrification
with mini-grid).
Off-grid isolated individual systems: A standalone individual power system is an off-grid system
that supplies a single rural customer with one or several generator sources (hybrid system) and
various electrical appliances. According to the power dimension, they can be grouped into four
categories: portable lights (i.e. rechargeable & solar lanterns), mini kits (i.e. pico hydro & pico solar
systems), Home Systems (supplied by solar SHS or pico-hydro) and Residential Systems (generally
supplied by hydro, wind or solar –with diesel backup or not). Off-grid isolated individual systems are
usually implemented for pre-electrification purpose (ahead of deployment of on-grid or off-grid
mini-grid systems). Most individual systems in Africa are still supplied by diesel/fuel gensets. (cf.
Handbook module on rural electrification with standalone systems).
1
Off-grid mini-grid are in contrast of on-grid mini-grid where the mini-grid is connected to the main grid and
is operated by a separate institution than the country’s public or private utility.
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Sustainable Energy Handbook – Module 5.1. Rural Electrification
3 Technology overview
The electrification strategy of a central decision maker is driven by:
• priority loads such as public institutions (schools, health centre, administrative centre, trade
centre) and large population clusters outside the main cities
• least cost approach for each electrification scheme among a range of solutions including on-
grid and off-grid technologies (mini-grid and solar home systems)
As a result of this strategy:
• Off-grid solutions are proposed by central planners to priority loads and neighbouring dense
population clusters that are distant from the main grid (e.g. over 5-20 km)
• The electrification of populations by central planners in isolated areas that are not close to a
priority load may be delayed by many years and even decades.
For those populations and communities, the only way to get access to modern energy on a
reasonable time scale is to implement off-grid solutions from the market adapted to the range of
affordability. Individual off-grid solutions can empower the most remote communities to get a
critical first step onto the energy ladder with basic energy services such as lighting, mobile phone
charging, fans, TV, etc. Lighting and phone charging are the beginning not the end of energy access.
Once these basic needs are met, many populations are capable of expanding their energy
consumption to include higher level needs like refrigeration or even agro-processing. This will bear
the desired development impact considered by the sustainable energy for all initiative and permits
to realistically envisage the universal access objective for 2030 that would be impossible to reach
with only on-grid solutions.
Energized
Work 80 W 4 lights, phone,
radio, TV, sewing
machine
Media 40 W
4 lights, phone,
radio, TV
Home 10 W
4 lights, phone,
radio
Light 3W
2 lights, phone
Disconnected
Figure 2: The energy ladder (source: Azuri Technologies)
In non-isolated areas (e.g. that are close to the main grid – e.g. less than 5 km) consumers with
sufficient loads (above 100-300 kWh per household per year) and sufficient revenues (above 2000-
3000 $ per year) can be supplied through the extension of the grid. Several small load centres
located within the same area or along the same road shall be combined into a cluster. The cost per
kWh transported and distributed, excluding generation, has to be reasonable (not exceeding
0.15USD/kWh).
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Sustainable Energy Handbook – Module 5.1. Rural Electrification
In case the loads are only basic uses (lighting, mobile phone charging) with annual consumption of
less than 10 kWh usually associated to low revenue (less than 100 $ per year), even with the grid
being nearby, solar lanterns are the least cost option.
Isolated service areas (e.g. that are distant from the main grid – e.g. over 20 km) where loads are in
sufficient number (over 50 customers) and are fairly close to each other (less than 100 meters)
require local generation and local distribution network to avoid the high costs of extending the main
grid to these areas. Local mini-grids supplied by hybrid power systems are the most economical
solution.
In isolated services areas where loads are fairly distant of each other (e.g. over 500 meters) or are in
limited number (less than 20 customers), individual off grid solutions avoid the high cost of
deploying a local distribution network that would connect all these distant loads to a single local
generator or would mutualise the use of individual generators.
The graphic below summarises the decision-making process:
Distance
from grid
Size of
demand
Decision: grid extension off grid Decision: mini grid
or off grid? or individual system?
Concentrated: Dispersed: mainly
Some productive loads Minigrid Individual household lighting
system
Community Resource availability
organisation
Income level
Diesel Equipment availability
Renewable
Energy Solar home
Tech. - RET* system - SHS
Diesel - RET Wind home
hybrid system - WHS
Pico hydro
Battery
* RET = windpower, solar PV, hydro, biomass gasifier, biomass direct combustion
Figure 3: The decision making process (source: WB guide 2008)
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Sustainable Energy Handbook – Module 5.1. Rural Electrification
4 Benchmarks
Binary definition of energy access – ‘having access or ‘not having access’ – fails to capture important
differences in quality and quantity of energy supply technologies. Moreover, it does not recognize
the energy supply ladder, whereby a user’s improved energy access leads to more demand for
greater quantity and quality of energy. Intermediate technologies are critical steps on the pathway
to reliable, available, adequate, and high-quality supply.
The SE4ALL initiative is proposing use of multi-tier framework, as opposed to binary definition, to
track progress towards Universal Energy Access by 2030.This is grounded in the ways poor people
actually experience energy access. Tiers are based on the attributes of people’s energy supply, and
the services they use based on that supply. Indicative frameworks for household electricity are
proposed in the SE4ALL Global Tracking Framework report.
The indicative household electricity framework has six tiers: each defined by electricity supply
attributes such as quantity, duration, evening availability, affordability, quality of supply, and
legality of connection. A higher tier represents an electricity supply with better attributes and the
possibility of access to more modern energy services, which can translate to improved well-being for
users. The technologies likely to deliver these attributes range from kerosene/candles (Tier 0),
through to intermediate electricity technologies such as solar lanterns that enable lighting, radio
and mobile phone charging, to reliable grid supply that allows all electric applications.
The typical benchmark for rural electrification consists to compare each rural electrification
approaches, i.e. on-grid connection, off grid mini grid, off grid stand alone for the broad range of
uses on the energy ladder.
The table below displays the average connection cost per customer according to the broad range of
use on the energy ladder.
Continuous Spectrum of improving Electricity supply Attributes
Attributes Tier 0 Tier 1 Tier 1 Tier 1.5 Tier 2 Tier 2.5 Tier 3 Tier 3 Tier 4 Tier 5
Tier 3 and
Task lighting Task lighting 4 lights, General General Tier 2 and Tier 2 and any Tier 3 and
and phone and phone phone lighting and lighting and any low any low medium any high
Kerosene charging (or charging (or charging TV or fan (if TV and fan power power power power
Service Description lighting radio) radio) and radio needed) (if needed) applicances applicances applicance applicances
Peak available
- 1 5 10 20 50 200 500 2000 2000
capacity (W)
Duration
- 4 4 4 4 4 8 8 16 22
(hours/day)
Evening supply
- 2 2 2 2 2 2 2 4 4
(hours/day)
Average annual consumption per household
Load factor 17% 17% 17% 17% 17% 18% 20% 20% 25%
annual consumption
1,5 7,3 14,6 29,2 73 315 876 3504 4380
(kWh/year)
Price of electricity
5,0 4,8 4,0 4,0 3,0 1,0 0,50 0,30 0,25
(US$/kWh)
annual cost
7,3 35 58 117 219 315 438 1051 1095
(US$/year)
Average costs (US$/household)
Least cost 70 110 166 288 500 1800 3200 1600 1600
Likely electricity None Solar Stand-alone home
supply technology lanterns Mini grid on grid
systems
Table 1: Benchmark of Electricity access solutions up the energy ladder (Source: ESMAP and TAF)
The level of revenue per customer on the energy ladder starts at round 10 US$ per year for Tier 1,
increases to 100-500 $ per year for tier 2 and 3 and exceeds 1000 $ per year for tier 4 and 5.
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Sustainable Energy Handbook – Module 5.1. Rural Electrification
The level of investment ranges from 70 US$ for tier 1, increases to 300-1000 US$ for tier 2, and peaks
at 3000$ for Tier 3, 4 and 5.
5 Useful references
Basics on Rural Electrification and RETs
• Finance Structure and its Management for a Rural Electrification NAMA, UNDP, 2014
http://www.undp.org/content/undp/en/home/librarypage/environment-energy/mdg-
carbon/finance-structure-and-its-management-for-a-rural-electrification/
• DESCO: How a New Breed of Distributed Energy Services Businesses can reach 500mm
energy-poor customers within a decade, Bardouille, Persistent energy partners, 2014
• META Model for Electricity Technology Assessment, ESMAP, March 2014
• Decentralized Off-Grid Systems in DC, Bhattachaya, 2013
• Renewable Power Generation Costs in 2012: An Overview, IRENA, 2013
http://www.irena.org/menu/index.aspx?mnu=Subcat&PriMenuID=36&CatID=141&SubcatID
=277
• Sustainable energy planning: Leapfrogging the energy poverty gap in Africa, Szabó, JRC,
2013
• Lighting Africa: Market trends report, IFC-WB, 2013
• World Energy Outlook, IEA, 2013
• From Gap to Opportunity: Business Models for Scaling Up Energy Access, IFC 2011
• PRODUSE - Productive use of Energy: Manual for Electrification Practitioners, EUEI-GIZ,
2011
• Maximizing the productive uses of electricity to increase the impact of rural electrification,
ESMAP, 2008
Multi-tier approach for Measuring Access to energy
• A new multi-tier approach for measuring energy access, ESMAP, February 2014
http://www.esmap.org/sites/esmap.org/files/DocumentLibrary/Multi-
tier%20BBL_Feb19_Final_no%20annex.pdf
• Poor people energy outlook 2013, Practical Action
http://cdn1.practicalaction.org/docs/ppeo-2013-practical-action.pdf
• SE4ALL knowledge hub, DrVenkatta Putti, ESMAP
https://www.esmap.org/sites/esmap.org/files/06-KEF2013-SE4ALL_Putti-
KnowledgeHub_ESMAP.pdf
• The 2013 Global tracking framework report, World Bank ESMAP / IEA, Chapter 2 Universal
Access to Modern Energy services
http://www.se4all.org/wp-content/uploads/2013/09/7-gtf_ch2.pdf
Disclaimer: This publication has been produced at the request of the European Union. Its contents are the sole
responsibility of the consortium led by MWH and can in no way be taken to reflect the views of the European Union.
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