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SUSTAINABLE ENERGY REGULATION AND POLICYMAKING TRAINING MANUAL page 10.66 Electrification projects should be considered as necessary conditions for development, but not as sufficient conditions, and there are usually other overriding conditions. Priorities that are considered more important for rural development than electricity include basic health services, elementary schools, water supply, and feeder roads. Therefore, it is usual to identify priority areas where electrification would have a significant beneficial impact, rather than electrifying for the sake of maximizing the number of connections. The benefit points approach aims to incorporate this view. Several criteria that provide a definite planning framework are listed below (adapted from Thom (1998)): • Criteria in support of economic growth: – Allocate resources based in part on contribution by regions to the national economy (Gross Geographic Product, GGP); – Allocate resources based on maximizing the macro-economic impact of electrification undertaken; – Electrification projects contributing to economic growth – identify specific development projects that have high economic potential. • Criteria in support of socio-economic development: – Allocate resources to regions having a higher proportion of non-electrified facilities (health centres, schools etc.), where providing services would lead to greater benefits; – Allocate resources where there are complementary development initiatives in the regions, to enhance the impact of electrification; – Allocate resources according to general poverty levels. (Note that electrification may not be the most urgent or best way of addressing poverty, and projects may be more sustainable in wealthier regions rather); – Allocate resources according to the number of non-electrified households in regions (expressed as a percentage of total households in region); – Allocate resources according to the articulated demand for electrification. (note that this is open to political manipulation). • Other Criteria related to regional allocation of electrification resources: – Limitations on the practicality of supplying electricity to the regions (lack of transmission infrastructure or power supply capacity); – Avoidance of destabilized regions – as it will be difficult to establish financially viable projects in these regions. Note however that some countries have used electrification to help promote stability and establish a sense of belonging; • The argument that results is that electrification projects have the most significant positive impacts if they are part of a larger development plan for a specific area or region.
MODULE 10: INCREASING ACCESS TO ENERGY SERVICES IN RURAL AREAS page 10.67 Conclusion The development of rural electrification planning and criteria to aid planning is a complex subject. The aim in this document is to present an example of a relatively simple and transparent process that could be used for rural electrification planning. The process described follows a five-stage filtering process: • Identification of priority development nodes, usually political priorities and part of a national development plan; • Technology mapping based on least-cost supply and life-cycle criteria; • Project identification, clustering and costing based on criteria for financial viability; • Project prioritization based on economic criteria; • Adjustment for regional equity based on political imperatives. While the costing, financial viability and economic criteria are obviously very important, a simplified economic benefit points (BP) system can also be developed to make the system more transparent. The economic benefit points allocation should be based on sectoral priorities in local government, health, education, agriculture and water sectors covered in the national development plans, poverty eradication documents, etc. References Banks D I, 1999. Grid or off-grid settlement electrification Decisions, Criteria and Processes, Domestic Use of Energy Conference, Cape Town Banks D I, 2000. Electrification Modelling for South Africa, Discussion of the methodology employed. Prepared for: DBSA, Eskom, DME. RAPS, Pretoria. Banks D I, “Criteria to support project identification in the context of integrated grid and off-grid electrification planning”. Energy & Development Research Centre, University of Cape Town. 1998. Banks, D I Mocke F, Jonck E C, Labuschagne E L, Eberhard, R., 2000. Electrification Planning Decision Support Tool, Domestic Use of Energy Conference, Cape Town Foley G, 1992. Rural electrification in the developing world, Butterworth-Heinemann Ltd. Galen, P S, 1997, Electrification Decisions Points Report, Prepared for Development Bank of Southern Africa, and Energy and Development Research Centre Grierson J P, Determined Entrepreneurs, Sustainable Development, Swiss Centre for Development Cooperation in Technology and Management (SKAT), St. Gallen, Switzerland. Horvei T and Dhal H-E, :Rural Electrification in the Southern Africa Region: A Comparative analysis of objectives and experiences”. World Energy Council, Regional forum Southern and East Africa
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