Electrification and rural development: issues of scale in distributed generation

Despite the importance of electrification for economic and social development, over one billion people globally lack access to electricity, primarily in rural areas of developing countries. Alongside the traditional means of expanding access, large‐scale grid electrification, there exists another option for rural electrification: small‐scale and localized distributed generation (DG), often powered by renewable energy sources. DG systems can be grid‐connected or off‐grid and can range in scale from less than 10 W solar lanterns at the small end to 60 MW biomass generation. Although DG has enabled some level of access to electricity for millions of people, little or no research has analyzed how the scale or level of access to electricity has shaped the ways that programs are financed or are viewed by governments, or the developmental impacts that various levels have on end‐users. This article reviews the literature on DG in developing countries and finds that large‐scale DG systems require a different set of approaches to finance, end‐user training, and public policy support than do small‐scale DG systems. Our review also reveals that even the smallest scale DG systems improve users' quality of life, yet access to electricity alone is not sufficient to achieve desired economic and social development goals. Policy makers, donors, non‐governmental organizations (NGOs), and other actors engaged in rural development must both (1) make decisions considering the scale of DG programs, and (2) reflect on end‐users' needs and productive uses for electricity if rural electrification projects are to result in long‐term development benefits. WIREs Energy Environ 2015, 4:196–211. doi: 10.1002/wene.129 This article is categorized under: Energy Policy and Planning > Economics and Policy