IDEAS home Printed from https://ideas.repec.org/p/zbw/rwirep/781.html
   My bibliography  Save this paper

Rural electrification through mini-grids: Challenges ahead

Author

Listed:
  • Peters, Jörg
  • Sievert, Maximiliane
  • Toman, Michael A.

Abstract

Recent debates on how to provide electricity to the roughly one billion still unconnected people in developing countries have identified mini-grids as a promising way forward. High upfront costs of transmission lines are avoided, and unlike home-scale solar, mini-grids can provide sufficient electricity for productive uses. This note outlines the challenges the mini-grid sector faces to achieve that potential. To date, few examples of sustainably working mini-grid programs exist. We identify regulatory issues, low electricity demand in rural areas, high payment default rates and over-optimistic demand projections as among the key challenges. Business models that account for high transaction costs in rural areas and are based on realistic demand forecasts could considerably increase the commercial viability of village grids.

Suggested Citation

  • Peters, Jörg & Sievert, Maximiliane & Toman, Michael A., 2018. "Rural electrification through mini-grids: Challenges ahead," Ruhr Economic Papers 781, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    • Handle: RePEc:zbw:rwirep:781
    DOI: 10.4419/86788909
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/190950/1/1045531871.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.4419/86788909?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Gunther Bensch & Jochen Kluve & Jörg Peters, 2011. "Impacts of rural electrification in Rwanda," Journal of Development Effectiveness, Taylor & Francis Journals, vol. 3(4), pages 567-588, December.
    2. Peters, Jörg & Vance, Colin & Harsdorff, Marek, 2011. "Grid Extension in Rural Benin: Micro-Manufacturers and the Electrification Trap," World Development, Elsevier, vol. 39(5), pages 773-783, May.
    3. Parshall, Lily & Pillai, Dana & Mohan, Shashank & Sanoh, Aly & Modi, Vijay, 2009. "National electricity planning in settings with low pre-existing grid coverage: Development of a spatial model and case study of Kenya," Energy Policy, Elsevier, vol. 37(6), pages 2395-2410, June.
    4. Charles Muchunku & Kirsten Ulsrud & Debajit Palit & Wim Jonker‐Klunne, 2018. "Diffusion of solar PV in East Africa: What can be learned from private sector delivery models?," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 7(3), May.
    5. Lenz, Luciane & Munyehirwe, Anicet & Peters, Jörg & Sievert, Maximiliane, 2017. "Does Large-Scale Infrastructure Investment Alleviate Poverty? Impacts of Rwanda’s Electricity Access Roll-Out Program," World Development, Elsevier, vol. 89(C), pages 88-110.
    6. Michael Grimm & Anicet Munyehirwe & Jörg Peters & Maximiliane Sievert, 2017. "A First Step up the Energy Ladder? Low Cost Solar Kits and Household’s Welfare in Rural Rwanda," The World Bank Economic Review, World Bank, vol. 31(3), pages 631-649.
    7. Dominique van de Walle & Martin Ravallion & Vibhuti Mendiratta & Gayatri Koolwal, 2017. "Long-term Gains from Electrification in Rural India," The World Bank Economic Review, World Bank, vol. 31(2), pages 385-411.
    8. Kenneth Lee & Edward Miguel & Catherine Wolfram, 2016. "Appliance Ownership and Aspirations among Electric Grid and Home Solar Households in Rural Kenya," American Economic Review, American Economic Association, vol. 106(5), pages 89-94, May.
    9. Comello, Stephen D. & Reichelstein, Stefan J. & Sahoo, Anshuman & Schmidt, Tobias S., 2017. "Enabling Mini-Grid Development in Rural India," World Development, Elsevier, vol. 93(C), pages 94-107.
    10. Shahidur R. Khandker & Douglas F. Barnes & Hussain A. Samad, 2013. "Welfare Impacts of Rural Electrification: A Panel Data Analysis from Vietnam," Economic Development and Cultural Change, University of Chicago Press, vol. 61(3), pages 659-692.
    11. Jörg Peters & Maximiliane Sievert, 2016. "Impacts of rural electrification revisited – the African context," Journal of Development Effectiveness, Taylor & Francis Journals, vol. 8(3), pages 327-345, July.
    12. Molly Lipscomb & A. Mushfiq Mobarak & Tania Barham, 2013. "Development Effects of Electrification: Evidence from the Topographic Placement of Hydropower Plants in Brazil," American Economic Journal: Applied Economics, American Economic Association, vol. 5(2), pages 200-231, April.
    13. Dana Kassem, 2019. "Does Electrification Cause Industrial Development? Grid Expansion and Firm Turnover in Indonesia," CRC TR 224 Discussion Paper Series crctr224_2019_052v2, University of Bonn and University of Mannheim, Germany.
    14. Moussa P. Blimpo & Malcolm Cosgrove-Davies, 2019. "Electricity Access in Sub-Saharan Africa [Accès à l’électricité en Afrique subsaharienne]," World Bank Publications - Books, The World Bank Group, number 31333, December.
    15. Dana Kassem, 2019. "Does Electrification Cause Industrial Development? Grid Expansion and Firm Turnover in Indonesia," CRC TR 224 Discussion Paper Series crctr224_2019_052_2, University of Bonn and University of Mannheim, Germany.
    16. Anthony L. D'Agostino & Peter D. Lund & Johannes Urpelainen, 2016. "The business of distributed solar power: a comparative case study of centralized charging stations and solar microgrids," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 5(6), pages 640-648, November.
    17. Trimble,Christopher Philip & Kojima,Masami & Perez Arroyo,Ines & Mohammadzadeh,Farah, 2016. "Financial viability of electricity sectors in Sub-Saharan Africa : quasi-fiscal deficits and hidden costs," Policy Research Working Paper Series 7788, The World Bank.
    18. Trotter, Philipp A. & McManus, Marcelle C. & Maconachie, Roy, 2017. "Electricity planning and implementation in sub-Saharan Africa: A systematic review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 74(C), pages 1189-1209.
    19. Jay Taneja, 2018. "If You Build It, Will They Consume? Key Challenges for Universal, Reliable, and Low-Cost Electricity Delivery in Kenya," Working Papers 491, Center for Global Development.
    20. Bernard Tenenbaum & Chris Greacen & Tilak Siyambalapitiya & James Knuckles, 2014. "From the Bottom Up : How Small Power Producers and Mini-Grids Can Deliver Electrification and Renewable Energy in Africa [Quand la lumière vient d'en bas : Comment les petits producteurs d'électric," World Bank Publications - Books, The World Bank Group, number 16571, December.
    21. Kristine Bos & Duncan Chaplin & Arif Mamun, "undated". "Benefits and Challenges of Expanding Grid Electricity in Africa: A Review of Rigorous Evidence on Household Impacts in Developing Countries," Mathematica Policy Research Reports 4df837297b3a490e922d53edf, Mathematica Policy Research.
    22. repec:oup:wbrobs:v:27:y:2010:i:1:p:33-51 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bensch, Gunther & Gotz, Gunnar & Peters, Jörg, 2020. "Effects of rural electrification on employment: A comment on Dinkelman (2011)," Ruhr Economic Papers 840, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    2. Meriggi, Niccolò F. & Bulte, Erwin & Mobarak, Ahmed Mushfiq, 2021. "Subsidies for technology adoption: Experimental evidence from rural Cameroon," Journal of Development Economics, Elsevier, vol. 153(C).
    3. World Bank Group, "undated". "Africa's Pulse, No. 17, April 2018," World Bank Publications - Reports 29667, The World Bank Group.
    4. Michael Grimm & Luciane Lenz & Jörg Peters & Maximiliane Sievert, 2020. "Demand for Off-Grid Solar Electricity: Experimental Evidence from Rwanda," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 7(3), pages 417-454.
    5. Bayer, Patrick & Kennedy, Ryan & Yang, Joonseok & Urpelainen, Johannes, 2020. "The need for impact evaluation in electricity access research," Energy Policy, Elsevier, vol. 137(C).
    6. Richmond, Jennifer & Urpelainen, Johannes, 2019. "Electrification and appliance ownership over time: Evidence from rural India," Energy Policy, Elsevier, vol. 133(C).
    7. Gupta, Ridhima & Pelli, Martino, 2021. "Electrification and cooking fuel choice in rural India," World Development, Elsevier, vol. 146(C).
    8. Blimpo, Moussa P. & Postepska, Agnieszka & Xu, Yanbin, 2020. "Why is household electricity uptake low in Sub-Saharan Africa?," World Development, Elsevier, vol. 133(C).
    9. Sievert, Maximiliane & Steinbuks, Jevgenijs, 2020. "Willingness to pay for electricity access in extreme poverty: Evidence from sub-Saharan Africa," World Development, Elsevier, vol. 128(C).
    10. Lenz, Luciane & Munyehirwe, Anicet & Peters, Jörg & Sievert, Maximiliane, 2017. "Does Large-Scale Infrastructure Investment Alleviate Poverty? Impacts of Rwanda’s Electricity Access Roll-Out Program," World Development, Elsevier, vol. 89(C), pages 88-110.
    11. Simone Tagliapietra & Giovanni Occhiali & Enrico Nano & Robert Kalcik, 2020. "The impact of electrification on labour market outcomes in Nigeria," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 37(3), pages 737-779, October.
    12. Thomas, Daniel Robert & Harish, S.P. & Kennedy, Ryan & Urpelainen, Johannes, 2020. "The effects of rural electrification in India: An instrumental variable approach at the household level," Journal of Development Economics, Elsevier, vol. 146(C).
    13. Pelz, Setu & Aklin, Michaël & Urpelainen, Johannes, 2021. "Electrification and productive use among micro- and small-enterprises in rural North India," Energy Policy, Elsevier, vol. 156(C).
    14. Wagner, Natascha & Rieger, Matthias & Bedi, Arjun S. & Vermeulen, Jurgen & Demena, Binyam Afewerk, 2021. "The impact of off-grid solar home systems in Kenya on energy consumption and expenditures," Energy Economics, Elsevier, vol. 99(C).
    15. Giacomo Falchetta & Nicolò Stevanato & Magda Moner-Girona & Davide Mazzoni & Emanuela Colombo & Manfred Hafner, 2020. "M-LED: Multi-sectoral Latent Electricity Demand Assessment for Energy Access Planning," Working Papers 2020.09, Fondazione Eni Enrico Mattei.
    16. Francesco Tonini & Francesco Davide Sanvito & Fabrizio Colombelli & Emanuela Colombo, 2022. "Improving Sustainable Access to Electricity in Rural Tanzania: A System Dynamics Approach to the Matembwe Village," Energies, MDPI, vol. 15(5), pages 1-17, March.
    17. Kenneth Lee & Edward Miguel & Catherine Wolfram, 2020. "Does Household Electrification Supercharge Economic Development?," Journal of Economic Perspectives, American Economic Association, vol. 34(1), pages 122-144, Winter.
    18. Falchetta, Giacomo & Stevanato, Nicolò & Moner-Girona, Magda & Mazzoni, Davide & Colombo, Emanuela & Hafner, Manfred, 2020. "M-LED: Multi-sectoral Latent Electricity Demand Assessment for Energy Access Planning," FEP: Future Energy Program 305213, Fondazione Eni Enrico Mattei (FEEM) > FEP: Future Energy Program.
    19. Holstenkamp, Lars, 2019. "What do we know about cooperative sustainable electrification in the global South? A synthesis of the literature and refined social-ecological systems framework," Renewable and Sustainable Energy Reviews, Elsevier, vol. 109(C), pages 307-320.
    20. Candelise, Chiara & Saccone, Donatella & Vallino, Elena, 2021. "An empirical assessment of the effects of electricity access on food security," World Development, Elsevier, vol. 141(C).

    More about this item

    Keywords

    public infrastructure; rural electrification; energy planning systems;
    All these keywords.

    JEL classification:

    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O21 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Planning Models; Planning Policy
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:rwirep:781. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/rwiesde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.