Rural electrification: utilities' chafe or challenge?

The earlier research on electricity supply to rural areas has tended to address the technical and financial performance of both grid connected and decentralised power systems and the socio-economic impact of electrification. However, this study has chosen to examine the impact of the developments and trends on the approach to rural electrification and its implications for developing countries in particular. The study includes a comprehensive historical analysis of rural electrification programmes implemented in both industrialised and developing countries. A general conclusion is that rural electricity supply has always been considerably more expensive than the supply to urban areas and, as a consequence, utilities have been reluctant to extend the service to rural areas. In most cases government subsidies were needed to make rural electrification programmes feasible. In many industrialised countries, and some developing countries, separate organisations were made responsible for the implementation of these programmes. These organisations have met with varying degrees of success in reaching customers. In particular small-scale private rural utilities have seldom proved to be successful. Evidence suggests that, from a development point of view, electrification should preferably be a component of an integrated rural development programme. The electrification of rural areas has traditionally been based on electricity supply from a central grid. However in the future, the electrification of rural areas in developing countries will be increasingly based on decentralised power facilities. In this respect it is also emphasised that small-scale independent power producers should be seen as fully fledged suppliers of electricity to the public grid. The all-round unsatisfactory performance of the electricity sector of several developing countries calls for urgent reforms. However the results of the historical analysis and recent experiences in industrialised countries with privatisation in the power sector suggest that developing countries should ask themselves the questions what is the minimum amount of power sector reform that is needed. The study reveals that political stability, autonomy, and an appropriate utility organisation which is based on an analysis of the business environment and contemporary management, are needed to successfully implement future rural electrification programmes.