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close this bookRural Energy and Development: Improving Energy Supply for Two Billion People (WB, 1996, 132 p.)
close this folderChapter four - Options for rural electrification
View the document(introduction...)
View the documentProgress to date
View the documentPricing and financial policies
View the documentCost-effectiveness and the choice of alternatives
View the documentCosts of grid supplies
View the documentReducing initial investment costs by using appropriate design standards
View the documentMicro-grids supplied by diesel generators
View the documentElectricity supplies from renewable energy sources
View the documentRegulatory and price reforms, unbundling, and privatization
View the documentImplication for rural electrification
View the documentApproaches

Progress to date

Developing countries' efforts to extend electricity supplies to their populations have been impressive. During 1970-90. nearly 1.3 billion people were newly supplied with electricity from national grids, of whom 800 million were in urban areas and 500 million in rural areas (table 4.1).

In all regions the share of the population served rose. China accounted for nearly half of the increases. but the extent of service in Africa remains low. During this period. populations grew by 1.5 billion. and in low-income economies outstripped the growth of people with service: in Sub-Saharan Africa, the number of people with service grew by 55 million, total population grew by 220 million; in South Asia. the number of people with service grew by 250 million, total population grew by 320 million.

Low-income households in developing countries use electricity mainly for lighting, television, radio, and ironing; as incomes rise. refrigerators and other appliances become affordable. Table 4.2 provides data from a survey of electricity use in urban households in Indonesia. where the pattern was similar to that found in rural households in other countries. unless one counts fans. which are quite popular. air conditioning. which is one of the biggest sources of electricity demand in rich countries. is virtually absent. Electricity is also rarely used as a cooking fuel, for which it is both expensive and energy inefficient.

Table 4.1 Urban and Rural People Connected to Electricity in Developing Countries, by Region, 1970 and 1990 /percent)


Urban

Rural

Region

1970

1990

1970

1990

North Africa and Middle East

65

81

14

35

Latin America and Caribbean

67

82

15

40

Sub-Saharan Africa

28

38

4

8

South Asia

39

53

12

25

East Asia and Pacific

51

82

25

45

All developing countries

52

76

18

33

Total served (in millions)

320

1,100

340

820

Note These estimate are only approximations.

Source: World Bank project and sector reports, other materials and surveys of electicity statistics by the World Bank's regional staff in Asia and Latin America.

Table 4.2 Appliance Use in Households with Electricity in Urban Indonesia' 1987 (percent)

Income class

Activity

Low

Middle

High

Lighting

100

100

100

Television

31

63

83

Ironing

21

51

77

Economic activity

5

6

9

Refrigeration

1

6

9

Water pumping

1

4

26

Air conditioning

0

0

1

Cooking

0

2

8

kWh/household/month

24

47

130

Source: Peskin and Barnes (1994) This paper was a background paper for the World Development Report 1994 (World Bank 1994b).


Figure 4.1 Energy Efficiency and Lighting

One sometimes overlooked feature of electrification programs is that they may improve the efficiency with which energy is produced and used. A particularly dramatic case is that of electric lighting. in which even the incandescent lamp represents a 50- to 100-fold increase in energy efficiency relative to the kerosene wick lamp (figure 4.1). The fluorescent lamp, which is well suited to solar home systems. raises energy efficiency several hundred times. The quality of the light electric incandescent or tiuorescent bulbs provide is also vastly superior to that of kerosene lights or candles.

Although electricity from central grids, local Crisis, or renewables can be expensive in absolute terms, the combination of higher efficiency and better quality service is attractive to those renal confers able to afford it, and Nay also reduce the real costs of the service (for example. Iight) itself On the island of Java, Indonesia. for example, the use of electricity compared with kerosene led to a seven- to tenfold increase in lighting for newly connected consumers, the cost of electricity pet kilolumen of light output being about 5 percent of the costs per kilolumen of light provided by kerosene lamps. In most countries. the biggest sources of demand for electricity in rural areas and towns are often farms, agro-industries. and small commercial and manufacturing establishments (for irrigation pumping. water supplies, crop processing. refrigeration, and motive power). Typically 60 to 80 percent of the electricity supplied in developing agricultural regions is used for such purposes.

Thus rural areas and towns often use electricity for purposes that are socially and economically valuable. They do so often enough to justify the investment an economic perspective. The main questions about grid electrification in rural areas and towns relate less to its usefulness, than to financing and costs and whether alternatives are more cost-effective. As noted in the introduction, current moves toward market and regulatory reform in the industry are also resulting in new questions being raised about the role of public policy in the expansion of service. Let us consider these questions in turn.