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Table of Contents
For the majority of the world’s population today, the ability to access electricity goes unquestioned. However, according to a database produced by the International Energy Agency, this cannot be said for an estimated 14% of the global population; with the majority residing in sub-Saharan Africa and developing Asia, and around 84% of those living in rural areas (IEA, 2017).
Rural areas in developing countries have been looking into electrification through renewable energy technologies (RETs) because connecting to the grid has proved to be cost prohibitive and in some cases geographically infeasible (Bhattacharyya, 2013). Hence, RETs are believed to be a practical solution for rural electrification because they can function independently from the central grid. Furthermore, RETs can operate on whichever renewable resource is available at a given location; whether it be a village with sufficient solar irradiation to utilise photovoltaic (PV) panels, or a farmland where biomass is available, or an island that experiences enviable wind regimes. After conducting a review of a multitude of literature focused on the integration of RETs in sub-Saharan Africa and developing Asia, it has been observed that the most successful cases have been in South Africa and India (ibid.). Therefore, this research paper aims to take these two countries as case studies and perform numerous types of analyses to obtain an overall view of how effective RET deployments have been in these two countries.
Generally, RETs are segmented into five groups (Alstone et al., 2015). The smallest scale can harvest enough energy to charge small devices such as mobile phones, followed by pico-technologies that allow for small-scale lighting such as solar lanterns. The third scale are systems designed to meet the power demand for appliances of a household such as lighting and charging – this includes solar home systems (SHS). Systems slightly larger are able to control the load supply and demand of different locations from a centralised location, the mini-grid – this includes PV mini-grids (PVMG). Finally, the largest scale of electrification is that which can meet high power demands of large areas: the central grid (ibid.).
The Renewable Energy Policy Network for the 21st Century (REN21, 2014) reported that choosing the appropriate RET for a particular area is influenced by various local conditions, such as population density, topography, energy demand and distance to the existing grid (see Figure 1). The graph shown in Figure 1 illustrates the electricity retail cost for different RETs – this is shown to provide a general idea of why and where SHS is deployed instead of PVMG and vice versa. The line highlighted in green illustrates the optimal space for SHS and the area highlighted in red is of the PVMGs.
Figure 1: Electricity retail cost for different RETs (REN21, 2014)
Edit the graph
Experts recommend connecting to the grid only when the cost is of a reasonable range, the use of mini-grids (e.g. PVMG) in villages where a connection to the grid is too expensive, and stand-alone systems (e.g. SHS) in areas with high population density and weak demand potential (REFERENCE). According to the Energy for All report conducted by IEA in 2011, an estimated 30% of the world’s remote areas would be best supplied by grid extension, with the remaining 70% better suited to RETs, in particular, mini-grids (52.5%) and stand-alone systems (17.5%). Such figures illustrate the potential for investment in RETs for rural electrification. Thus, the focus of this paper is on the deployment of SHS and PVMGs.
Secondary literature concerning the implementation of RETs in rural India and South Africa are in abundance. A book by Palid and Bhattacharyya entitled “Mini-Grids for Rural Electrification of Developing Countries” includes numerous articles concerning PVMGs and their technical and economic viability in different developing countries. A multitude of other publications address the impacts of electrification in rural India and South Africa (Bernard, 2012) (IEG, 2008) (Khandker, 2012). Moreover, a large and growing body of literature study the deployment strategies used by India, South Africa and surrounding countries, for instance performance evaluation, development goals and business models. (Bhattacharya, 2015) (Yadoo, 2012) (Schnizer et al. 2014) (IEA, 2011)
One criticism of much of the literature on RETs is that they have failed to conduct a comprehensive analysis of RET deployment in countries of different regions. With a much more systematic paper, this research paper will provide an understanding of why certain RETs are used in a particular location, and the impact external factors have in ensuring successful deployment of the technologies. Thus, with an individual case study and a comparative analysis of the chosen RETs, the challenges, incentives and strategies of each country, as well as the technical and economic standing of each technology, can be understood. For example, in South Africa, the SHS is widely used, but in the case of India, most efforts have revolved around PVMG deployment. Furthermore, previous studies have not focused on secondary impacts of electrification in rural India and South Africa. Thus, with an analysis of the social, environmental impacts, the different outcomes of the technologies can be studied to comprehend how and why specific strategies succeed in one location and fail in the other.
The primary aim of this research paper is to study the techno-economic suitability of SHS and PVMGs and their respective deployment strategies in India and South Africa. A secondary aim is to evaluate the impacts of electrification in these two locations. Therefore, to achieve this, the following objectives must be met:
- Complete a comparative techno-economic analysis of the technologies.
- Analyse the challenges, incentives and strategies for RET deployment.
- Conduct a comparative impact analysis for rural electrification.
In moving forward, Section 2 will discuss the methodology of the project. Section 3 will demonstrate the results obtained from the techno-economic analysis. Following that will be the case studies of the two countries, with Chapter 4 and 5 relating to India and South Africa respectively. The aim of Chapter 6 is to explore the impacts of rural electrification, which will include an analysis of social and environmental effects. Finally, the last chapter will provide a summary of the findings and conclude this research paper.
This project will act as a descriptive research paper that includes both qualitative and quantitative analyses of cases studies from secondary literature, such as published journal articles, books, and reports. The literature will be found from the university’s online and library as well as search engines such as Web of Science and Google Scholar. Literature will be examined for relevant information that can help in achieving the aims and objectives of this dissertation. For the case studies, challenges, strategies and possible incentives of RET deployments found in literature will be analysed and compared.
As for the impact analysis in Section 6, it will aim to evaluate the various impacts of rural electrification and highlight the differences and similarities in case studies of the two countries. These impacts will be reviewed in conjunction with indicators found in ‘grey literature’ such as government reports, aid agency findings, United Nations and other organisation publications (IEA, REN21, World Bank Group).
A few scope constraints have been put in place as this paper must be completed within a given timeframe; the main one being in the impact analysis. Generally, such analyses include social, environmental, economic and political impacts of a given change. However, in this project, the analysis will only take into account the social and environmental impacts.
Finding techno-economic characteristics for RET deployments in countries of different regions may prove to be time-consuming. Therefore, analyses conducted in South Asia and sub-Saharan Africa will be assumed applicable to India and South Africa respectively.
The framework will adopt the same approach as in Figure 2, ensuring each RET is analysed under the same category to guarantee a valid comparison. This approach appears to be widely accepted and recognised and has been previously used by Luong et al. (2012) to assess the sustainability of various RETs. The purpose of this is to explore the flaws and suitability of each technology at a given location.
In addition, to give an overall view of the RETs’ techno-economic standing, a ‘SWOT’ technique will be used as it would provide an overall synopsis of the technologies and highlight the short and long-term pros and cons of their deployment.
The LCOE is a model commonly used for performing economic assessments to compare the unit cost of different technologies over their economic life (Mint, 2014) (OECD, NEA/IEA, 2010) (Comello et al., 2017). In this research paper, it will be used to provide an indicator of the cost competitiveness of alternative electricity generation platforms
The equation according to …. Is as follows:
LCOE= Cc+Com+Cf+Cr Eout Equation 1
is the capital cost,
Comis the operation and maintenance cost,
Cfis the fuel cost and
Cris the replacement cost, is the total energy output; all of which are calculated using Equations 2-5.
However, as some values were not found in literature, some assumptions for the economic assessment had to be put in place (chapter 22.214.171.124).
Com=AOMC∙ 1+eod-eo∙1-1+e0 1+dN
Cr=∑i=1v Citem∙ 1+e0 1+dNR
AOMC = Annual operation & maintenance costs
e0 = General escalation factor
d = Discount rate
ef = Fuel cost escalation factor
C item = Cost of item being replaced
N = Lifetime of technology
NR = Year of replacement
A = Annual energy output
- Because RET’s do not operate on fuel, the fuel cost (Cf)will be neglected.
- The capital cost(Cc)usually takes into account the fixed costs associated a product or service regardless of the location. Therefore, data from a study conducted in a country in any of the two regions will be assumed valid to use for India and South Africa. For instance, if the fixed costs of a PVMG were found from a study conducted in Bangladesh and Kenya, it will be assumed applicable for India and South Africa respectively.
- For a coal-powered grid, the fuel escalation factor (ef) is assumed to be 4% (Nguyen, 2006), because the primary electricity supply in both countries is coal. (National Electricity Regulator, 2001 cited in Wikler, 2005) (Government of India, 2006 cited in Banejree & Pillai, 2009)
- The cost escalation factor (eo) is defined as the change in the cost of a product in an economy affected by inflation, as well as technological, environmental and political conditions. However, in this particular study, it will be assumed to be equal to the average inflation rate (2002-2012) of each country, as previously done by Nguyen (2006):
- India’s inflation rate: 5.92%
- South Africa’s inflation rate: 7.10%
- The discount rate (d) represents the minimum interest set by the Federal Reserve on loans given to banks. Because this value is subject to changes on a yearly basis, the rates used for each country will be averaged over a decade to ensure results are accurate:
- India’s discount rate (d) : 6.31%
- South Africa’s discount rate (d): 8.45%
Note: Some values were not readily available in literature, for instance, the Federal Reserve Economic Data only includes South Africa’s discount rate until the year 2012. Therefore, to ensure a valid comparison, all rates were averaged over a 10-year period from 2002-2012.
Add graphs in appendix
To ensure a change as large as implementing electrification is executed effectively and successfully, an impact evaluation that includes aspects of both human and environmental development must be performed. If performed at an early stage, policymakers and program designers would be able to make the necessary adjustments to avoid any deviations occurring in the future. (reference)
As explained in Section … , due to time constraints, the impact analysis will only take into account the social and environmental effects of electrification in rural India and South Africa. A brief description of the framework is as follows:
Using the four measures shown in Table 1, both qualitative and quantitative indicators will be obtained and used to conduct an in-depth comparison of the two RETs in rural India & South Africa.
Table 1: Social Impact Indicators
The deployment of the chosen RETs has only recently taken effect in rural India and South Africa; therefore some of the quantitative data may not be readily available in literature. Hence, the analysis will be conducted based on qualitative data found in secondary and grey literature. For instance, in the case of studying the health impacts, improvements and developments in the healthcare will be considered as indicators.
In December 2015, a global action plan was put in place by the United Nations Framework Convention on Climate Change (UNCC) to avert and minimise the loss and damage associated with the adverse effects of climate change. Governments of 195 countries agreed to ensure that the global temperature rise is kept below 2 degrees above pre-industrial levels. ….
However, it was recognised that developing countries might take longer to mitigate the emissions due to their reliance on non-renewables to meet their power demand, in which case governments have agreed to offer continued and enhanced support. Integrating RETs in these countries would play a key a role in achieving the agreement’s goal in mitigating carbon emissions.
Therefore, the impact analysis will also include the environmental impact that RET electrification could pose in rural India and South Africa. A measure of the total offset carbon emissions will be obtained by finding the carbon emitted kilowatt-hour by the grid from case studies done in literature. A brief discussion of other environmental impacts will also be performed.
As explained in Section 2.3, this chapter will analyse the technical effectiveness and economic standing of each technology relative to the other. The technical analysis will compare the functional efficacy of the SHS to that of the PVMG to help in understanding why one technology is favoured over the other. Because the technical characteristics of an RET is not dependent on the location, but rather the manufactured design, the location of the RET will not be considered.
On the other hand, the economic aspect will include a comparative analysis of each RET’s LCOE, which will then be compared to that of the grid extension to understand the cost-effectiveness of RET deployment.
Before proceeding to examine the performance of the SHS and PVMG, it is essential to understand the components of each RET. A typical SHS consists of PV module(s), a battery bank for electricity storage, and a charge controller that controls the inflow and outflow energy to and from the battery bank (Chaurey & Kandpal, 2010). However, PVMG includes an additional component known as the inverter, which plays an integral part in ensuring the final output of a PVMG is in the form of alternating current (AC) (ibid.).
It is recognised that the size and capacity of a device determine its efficiency, i.e. a larger battery or inverter results in higher efficiencies because the actual energy output is higher. The efficiency of the battery is typically 85% for SHS, as opposed to PVMG which has an efficiency of 90%. A similar trend is reported for the inverter, with efficiencies of 90% and 95% for SHS and PVMG respectively.
Areas where significant differences have been found between SHS and PVMGs are related to the type of charge controller used in each RET. On the one hand, SHS uses a low-cost means to achieve constant voltage battery charging through pulse width modulation (PWM), which has an efficiency of 80-85%. On the other hand, the majority of PVMGs utilise maximum power point tracker (MPPT) controllers to obtain the optimum voltage. These controllers have an efficiency of 90% (Chaurey and Kandpal, 2010). Therefore, it can be concluded that the PVMG holds an advantage over SHS due to its controller.
Chaurey and Kandpal (2010) also state that the power capacity of a RET is determined by the individual components’ capacities. Generally, PVMG is designed to supply electricity centrally to establishments spread within a designated geographical area. Typical capacities range between 100-800Ah, which is much higher than that of an SHS that typically has a range of 20-75Ah. Similarly, the capacity of the PV module differs between the two RETs. For a PVMG, modules have a capacity of 75, 80 or 100 Wp (Chaurey & Kandpal, 2010), whereas a typical PV module of an SHS can have a capacity of 18, 37 or 74 Wp (Sastry, 2003). In summary, the PVMG has an advantage over the SHS due to its higher capacity components that can convert and store more energy.
In past years, both RETs have been used to facilitate a multitude of large-scale rural electrification programmes. In South Africa, the SHS programmes are regarded as a success as it has been proven a viable solution for bringing development to the rural population (Azimoh et al., 2015). However, recent reports warn that many ESCOs are opting out of the business, as it has recently been fraught with challenges due to abuse, theft and vandalism of equipment, as well as a few economic aspects that will be covered in chapter 3.2 (ibid.).
What many reviewed literature failed to include in studies is the effect of weather on the durability of the RETs. In countries that experience heavy rainfall or wind, many components may fail earlier than expected. One particular study that considered weather was conducted by Azimoh et al. (2015), who found that a significant drawback to SHS is its low capacity and low performance during the rainy season. However, most studies in the field of the durability of SHS and PVMG have only focused on non-technical aspects such as theft and vandalism.
In regards to abuse of the system, many studies have found that it is a critical issue with the SHS. (REFERENCE) Because it is usually leased and owned by the user, it is their full responsibility to manage, repair or replace any components. However, due to lack of user training in the operation and maintenance of the RET, this poses a threat to its durability. For instance, the ESCOs in South Africa have reported cases of users tampering with the control units by bypassing charge controllers to gain direct access to electricity from the battery. Incorrect use has a substantial impact on the components of the SHS, primarily the battery, as it results in frequent replacement of devices, which adds to the overhead operation and maintenance costs.
In contrast, households connected to a PVMG are only required to pay an upfront fee and monthly charges for their consumption, as it is usually the supplier’s responsibility to control the energy supply and consumption, as well as to cover the costs of maintenance and replacement. Additionally, the centralised location of its components makes it easily accessible for technicians, thus making the maintenance process much more manageable and most likely requiring fewer labour hours. Regarding safety, Nguyen (2006) states that because the PV modules of SHS are mounted on the user’s premise, usually rooftops, they are susceptible to theft and vandalism. Additional strength to the centralised location of a PVMG is that its equipment can be secured and locked in place, making it less vulnerable to theft.
3.1.3 Flexibility and Adaptability
As far as adaptability is concerned, PVMG can quickly adjust to technical design changes. For instance, they can be optimised by increasing the capacity of components so that they can support higher loads. Although this is possible with SHS, such modifications are not easily achieved as multiple batteries would need to be changed, as opposed to only one in the case of PVMG, which proves to be costly as well as labour intensive (Chaurey and Kandpal, 2010).
Bhattacharyya (2013) states that the ultimate goal for South Africa is to extend the central grid connection to areas previously supplied by PVMG. A study conducted by Chaurey and Kandpal (2010) reinforced the possibility of interconnecting PVMGs with the grid in the near future to sustain future energy exchange, leading to improved load management. This is considered advantageous as it provides PVMGs the opportunity to supply power to utility companies while simultaneously supplying individual customers nearby (Knuckles, 2016). On the contrary, a weakness to the adaptability of PVMGs is that it is highly dependent on population density i.e. it is only appropriate for use in a site with a high number of houses that are densely located (Chaurey and Kandpal, 2010).
The technical design of SHS differs from PVMG in several vital respects. The SHS includes just one PV module as it is considered a low-cost portable option, while the PVMG requires many to supply sufficient load to a variety of appliances (Chaurey and Kandpal, 2010). Moreover, the SHS uses customised DC appliances, usually with energy efficient designs, to meet the energy demand of domestic end uses; as opposed to the PVMG which supplies power to different load points in the form of AC electricity. (Chaurey and Kanpal, 2007 cited in Chaurey and Kanpdal, 2010). This can be considered advantageous for PVMG users because AC appliances are readily available in the market and can be purchased locally. Furthermore, the devices used in an SHS may not always adhere to quality standards, which poses a threat on the functionality of the system as using energy inefficiently has been proven to significantly impact the /.. On the other hand, the AC appliances used in a PVMG are usually under orderly regulation by the respective standards to ensure a high level of safety and reliability (ibid.).
On the question of load management, SHS users are given complete autonomy of managing the energy consumption; this means that the battery of the system could be at risk of ‘deep discharging’ (REFRENCE – APPENDIX) if all the stored energy is used at once. In the case of PVMGs, the hours of operation are fixed at the generation level, and at the consumption level, the system uses individual meters and/or load-controlling devices to monitor its energy consumption. Moreover, different types of energy consumption tariffs can be incorporated by the PVMG, which is believed to usually improve the affordability for customers (Banerjee et al., 2008; World Bank, 2008). For example, while ‘energy-based tariffs’ charge for the actual electricity consumed in kWh, ‘flexible tariffs’ change according to demand, thus providing incentives for electricity usage when surplus energy is available. (REN21, 2014)
In the same context, the two RETs differ in their flexibility in connecting appliances to the power supply. PVMG can supply electricity to a variety of load points, from domestic end use to commercial. This differs greatly to SHS, which is designed to service fixed types of load like lighting, radio or television. (Knuckles, 2016). That being said, the SHS carries an advantage over the PVMG as it can be shared or moved around multiple houses.
Both RETs share strength in their flexibility as they can both provide at least two days of autonomy, meaning they can continue to supply the village for at least two days of insufficient solar insolation (Chaurey & Kandpal, 2010). Dunning et al. (2015) state that this is hugely beneficial for a country like India that experiences unpredictable solar irradiation during the Monsoon season.
The capacities of the SHS and PVMG were found by reviewing multiple case studies and finding a value that has been commonly used. However, due to insufficient data in literature, some values such as the replacement costs were assumed equal to the prices on an e-commerce website known as Alibaba (ENDNOTE). These values will simply be used as indicative prices for the purpose of a rough estimation.
After reviewing multiple RET case studies, capacities was estimated by averaging values that have been commonly used. For the SHS, its capacity will be assumed to be equal to 0.75kW, whereas the PVMG capacity will be 50kW.
To find the actual power output, the capacities were multipled by the system efficiency and annual solar radiation. For this study, the annual solar radiation was found from historic yearly averages between 1961-1990, where India and South Africa had 2509 and 3141 sunshine hours respectively (Current Results, 1990) (NOAA, 1990).
Regarding the system efficiencies, they were calculated by multiplying the efficiency of each component it comprises of – these values were found from Chaurey & Kanpdal (2010) studies.
ηSHS = ηmodule ∙ηcontroller ∙ ηbattery = 0.15*0.0825*0.85 = 11% ηSHS = ηmodule ∙ηcontroller ∙ ηbattery ∙ ηinverter = 0.15*0.95*0.9*0.9 = 12%
India is a rapidly emerging country predicted to have the second largest economy in the world by 2050 (Gray, 2017). Located in South Asia, India has 29 states and seven union territories, with an independent government for each. With 1.25 billion inhabitants, India’s share of global energy consumption reached 5.5% in 2016 and is estimated to rise to 11% by 2040. Despite conscious efforts undertaken by the governments, energy access remains a challenge, especially in rural areas, and thus disrupts the quality of well-being in India.
Turning now to the development of the country, studies have found a large rural-urban ‘gap’ in wage, health, education and other indicators of well-being. For instance, Saikia et al. (2013) observed a significant difference in the mortality rate of different states, where a much a lower rate was found in more developed states like Goa and Kerala compared to less developed states like Assam and Odisha. The most underdeveloped areas consist of 11 states, have the largest share of the rural population, and lowest electrification rate (Lewis, 2010) (Mahapatra, 2010). By inspecting the electricity provision map shown in Figure 3, it can be seen that 6 out of 11 undeveloped states have a combined electrification rate of less than 60%, with a projected combined population of over 535 million by the end of 2018 (Census of India, 2006).
Figure 3: Map of electricity provision (left) and poverty distribution (right) in India.
What stands out is the correlation between underdevelopment, electricity provision and poverty levels. Although lack of access to electricity may not be the primary cause of the health example previously discussed, studies have shown that advancement in health and education in rural areas are being held back by infrastructure bottlenecks, primarily electrification, and thus the correlation can be supported (Khandker et al., 2013) (Bridge et al., 2016) (OECD, 2017). (add more sources)
For 59% of the rural population, constituting about 72.4 million rural households, using biomass for heating or kerosene for lighting is a struggle that they have grown accustomed to, as they represent the primary energy sources in houses. Although biomass is a renewable energy source, there is some evidence that biomass may be the cause of many health problems due to its emission of carbon monoxide and other harmful gases (Balakrishnan et al., 2004 cited in Epstein et al., 2013) (Smith et al., 2000). According to the World Health Organisation, over 1.2 million premature deaths result from indoor air pollution caused by the incomplete combustion of biomass. As indicated by Figure 4, the highest number of death takes place in Southeast Asia and sub-Saharan Africa (WHO, 2006). Therefore, to enhance the well-being of its citizens and consequently improve the economy, India has attempted to integrate other RETs, such as SHS and PVMG, into its rural electrification programmes over the past few years.
As previously stated, the country relies heavily on non-conventional sources for energy. With the shortage of fossil fuels comes the issue of energy security. However, as a still developing country, one could presume that India still has an opportunity to diversify and shift its generation strategy towards renewable energy sources, provided it receives financial support from the developed world.
“Availability, affordability and sustainability of energy supply are interlinked facets of overall energy security.” (IEA, 2011) (policy considerations for deploying ret – reference)
Many detrimental threats are being caused on India by climate change, including droughts, unpredictable monsoon, a decrease in crop production and consequently a decrease in food security (Blah, 2016). Parikh (2012) found that to afford such adjustments, India’s GDP must grow annually by 8-10% for the next 2-3 decades. Considering the average growth in the last decade was 7%, it is clear that this is difficult to achieve. (REFERENCE)
At the Paris Agreement, a global action plan put in place by the United Nations Framework Convention on Climate Change (UNCCC), India strongly voiced the need for intervention from developed countries in the form of financial aid to achieve the plan. Therefore, the more advanced countries pledged an annual fund of $100 billion in climate finance for developing countries by 2020, with a commitment to further increase it in the future.
Rural electrification using RETs would also grant power distribution companies the opportunity to achieve local policies such as the Electricity Act 2003, which implemented a scheme known as the Renewable Purchase Obligation (RPO). The plan stipulated that a share of the total power provision must be from renewable sources (Shereef and Khaparde, 2013). Later in 2001, the scheme was modified to being solar-specific, encouraging companies to benefit from India’s sizeable solar potential. Moreover, to boost the reach of renewables, India enacted the lowest-ever tariff for solar technologies following the drastic decrease in cost of PV modules in 2017, which was mainly due to the technological advancements in the sector. (REFERENCE)
In their study, Banerjee and Pillai (2009) found that the land area required to meet the entire population’s power demand through solar energy technologies is only 0.1%. These examples indicate the level of responsibility that the country has taken to encourage ……………………….
Most enterprises are located in rural areas and thus are considered important sources of employment and income. However, Balachandra (2011) reported that for any RET deployment programme to achieve sustainability, energy enterprises must be provided with incentives ….. This would also encourage enterprise to increase the financial returns of rural communities, as well as offer them with the opportunity to improve the quality of their services (ibid.).
Following a proposal from the World Bank, who agreed to lend India over $1 billion to support the production of solar power facilities, the government set a target to increase energy production from solar power generation to 100 GW by 2022. (REFERENCE) This figure exceeds previous goals set by the Indian government of 20 GW and 50 GW in past years, as well as international ……, both being surpassed by the great level of investment into RET facilities.
The most common issue faced by developing countries in exploiting India’s notable solar potential is lack of adequate financing. For India to fulfil the pledges it made in the COP21, the energy sector would require an estimated US $2.5 trillion (Blah, 2016). However, considering India does not have a domestic debt market, the high initial investment needed for RETs makes this hard to achieve. This challenge has forced the country to rely heavily on grants and foreign investors, mainly because locals avoid investing in India due to the existence of a multi-regulatory system of state and federal governments, as well as the growing threat of corruption (Patel, 2009). Balachandra (2011) agrees with this and states investment challenges include the “lack of integrated policy framework, a division of the energy sector across multiple agencies, overemphasis on the grid, misdirected subsidy regimes, ineffective implementation and resource constraints”. EY’s Ben Warren also agrees with this and states the policy uncertainty is the most significant obstacle to investment in renewables. Among the problems are skewed tax relief, fossil fuel subsidies and retroactive changes to renewable incentives, which make them risk to investors.
Moreover, the existence of at least four bodies in the energy sector makes it difficult to work cohesively towards a common goal, especially when a massive change like RET deployment is introduced (Blah, 2016). Furthermore, the fact that each state is governed differently makes it difficult to enforce a strategy for all. Nevertheless, India has still made notable strides in installing RETs in thousands of its rural villages through the strategies discussed next in Chapter 4.4.
Emphasising the importance of rural electrification, the Ministry of New and Renewable Energy (MNRE) launched a scheme to local power agencies called the Remote Village Electrification Programme (RVEP) in 2001. Under this programme, the MNRE provides financial subsidies for RET projects including solar, hydro and biomass. Additionally, it covers up to 90% of the capital costs of both SHS and PVMG, including the annual maintenance costs for five years; hence, the user would only have to 10% of the capital cost with the monthly fee. Another programme dedicated to rural electrification is the Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) programme established in 2005, with the primary objective of providing free electricity to households below the poverty line, and consequently accelerating development and improving the rural infrastructure.
It is important to mention that the existing literature indicated that the most commonly used solar technology under the branch of SHS in India is the solar lighting system (SLS), which can be in the form of individual lamps or a system with multiple lighting units. According to Barman et al. (2017), the main strategies used for the adoption of SLS in the case of India are leasing the system to the user, providing the user with subsidies, or financing the user. A critical factor that determines the consumer demand and hence the integration of relatively new technology is the concept of ‘willingness-to-pay’. Willingness-to-pay (WTP) is defined as the highest price that an individual indicates he/she is willing to pay for one unit of a good or service. Moreover, considering that it has only recently been introduced, there is inadequate awareness surrounding it. For instance, a survey conducted in the state of Uttar Pradesh found that much of the rural population were not aware SHS existed as an electrification or lighting option, and those that did were not aware of how to acquire it (Urpelainen & Yoon, 2015).
In their study, Bhandri and Jana (2010) found that the more males within a household, the more likely that family would be willing to pay. In the Indian Sundarbans, it is usually the males who generate the income, thus the more , the more likely the household would be able to afford a RET connection. A similar conclusion was reached by the REN21 (2014), where they observed that WTP increases with household income, money spent on kerosene and education level. Hence, it can be presumed that the findings from the studies conducted by Urpeleinen & Yoon (2015) on poor awareness, and by Bhandri and Jana (2010) on WTP apply to many other rural Indian villages. With low awareness comes WTP, thus resulting in a weak demand and consequently forcing companies to reconsider the potential for RETs in the market.
Moving onto PVMGs, it has been reported that they were developed in the mid-1990s and had been expanding since; with more investments in recent years than ever before (Department for International Development, 2016). Local power agencies such as the West Bengal Renewable Energy Development Agency (WBREDA) and the Centre for Rural Education & Development (CREDA) have electrified around 10,000 and 57,698 households respectively. Apart from government-led enterprises, private foreign investors such as the Norwegian company SCATEC Solar were responsible for the electrification of 30 villages in three different states (Palit et al., 2014). Such support proves the optimistic future for PVMGs in the market.
Nonetheless, a considerable drawback to PVMGs is the fact that any discontinue of electricity results in dissatisfaction of multiple users with the supplier. As a reaction to this, a system called the Village Energy Committee (VEC) was developed to ensure better functionality of the plants as MNRE reports show that some of these projects may fail if the user attempts to repair or replace any components within the technology. The VEC is responsible for communicating with users and dealing with any issues upon the disruption of the power supply (ibid.).
A report published by the Energy Sector Management Assistance Program (EMSAP, 2000) states that a significant challenge in the PVMG planning process of is estimating the total load put on a PVMG that users are likely to enact on the system. This is important because under-sizing results in user dissatisfaction and over-sizing increases the capital cost, and consequently leading to the user’s unwillingness to pay (Kobayakawa and Kandpal, 2015). Estimating the required size can be achieved by performing a needs assessment by the government to interview locals and understand their potential demands.
Studies show that over the past decade, there has been an increasing demand for RETs as locals explore the benefits of electrification. However, due to the difference in functionality and scale, this impacts the two RETs differently. On the one hand, the SHS is incapable of dealing with the increase in demand because the larger the load, the larger the components needed to sustain it. As previously mentioned, SHS is a low-cost portable option, hence the addition of high capacity components may not be suitable. On the other hand, PVMGs can withstand and supply much higher loads, and generation can be increased by adding more PV modules.
It has been reported that there is an increasing demand for RETs as many locals begin to explore the uses of electricity and how it can be integrated into their daily activities. This impacts the two RETs differently. On the one hand, the SHS is incapable of dealing with the increase in demand because the larger the load, the larger the components needed to sustain it, which defies its purpose as a “low-cost portable option”.
Meeting India’s electricity demand, which has grown by 10 per cent a year over the past decade, and attaining the country’s economic growth targets will require significant investments in power-generation capacity and related infrastructure, and in transport, buildings and industry sectors, creating important opportunities for renewable energy deployment
The electrification rate change in both rural and urban areas of Indian states between … and …. is shown in Figure … It can be seen that the largest changes are found in states included in the ‘developmental divide’ mentioned previously (Figure….), which were most heavily impacts by the RET strategies mentioned above
this section is too long – consider revising
5 Case Study: South Africa
5.1 Background & History
South Africa is located at the southern tip of the African continent with a population of 57 million as of March 2018, where almost 47% reside in rural areas, and 12.3 million lack access to electricity (Bokanga et al., 2014). It reportedly has the strongest economy in the region with a GDP of US £122 billion (Karekezi and Kithyoma, 2002). Since colonialism, the native population have had their political, economic and social freedom restricted up until 1994 when the apartheid regime ended (Kagee and Price, 1995). At the end of the apartheid rule, the electrification rate was as low as 30%, with most of the electrified population residing in urban areas. The segregation of natives is prominent to this day and strongly associated with poverty and difference in income among various racial groups, whereby the white population, who only make up 9% of the total population, have an income 75% higher than the natives (Davidson and Mwakasonda, 2004). Thus, one could conclude that connecting to the grid is only feasible for …
In recent years, the government of South Africa has been focusing on prioritising access to affordable, environmentally sustainable and economically efficient energy (Spalding-Fecher, 2003). The Integrated National Electrification Programme (INEP) was initiated in …. With a goal of providing access to all
Established in 1923 is a power utility company called Eskom, which has had a monopoly of electricity generation to this day. Eskom is responsible of producing 95% of the electricity and distributing 55% (Bhattacharyya, 2013). In that context, 93% of the power is generated using coal, and is consequently responsible for more than half of the greenhouse gas (GHG) emissions (Inglesi-Lots and Blingnaut, 2011).
In terms of RETs, studies show that off-grid PV technologies like SHS and PVMG have been widely disseminated in remote areas, with a few hydro facilities.
5.2 RET Incentives
5.3 Challenges in RET deployment
5.4 RET Strategy: SHS vs PVMG
To minimise the climate change impacts and improve the life of its citizens, the government has joined forces with Eskom to initiate rural electrification schemes that provide affordable, environmentally sustainable and economically efficient energy for all (Cook, 2013). The year 1999 saw one of the earliest programmes, which aimed at supplying 350,000 households in five areas with SHS. The agreement was that the user is only responsible of paying a fixed monthly fee, whereas the government provides the concessionaire a subsidy of US $260 (Davidson and Mwakasonda, 2004). However, due to its low capacity, SHS was not sufficient to meet the demand of many households, which resulted in failure of the project.
Electrification rates increased from 35% in 1990 to 84% in 2011. Several authors attribute this dramatic increase to the transition from the racial segregation apartheid government to a democratically elected government in 1994. Between 1994 and 2010, over 5 million households and 12,000 schools were
The main success factors of the electrification programmes was Eskom’s good infrastructure, well-qualified staff and ability to
6 Rural Electrification Impact Analysis
As presented in Table 1, rural electrification impacts can be split into four ‘social’ categories; education, health, employment and ‘other’ impacts. Each category will explore the relative impacts in the two case studies and assess them using them ‘SWOT’ technique. Additionally, this section also takes into account the offset of carbon emissions in the two countries and any other aspects that may affect the environment.
6.1 Social Impacts
6.1.1 Education Impacts
Education plays a vital role in reducing poverty levels in developing countries. A study in Assam, India, concluded that education is essential in a village’s overall development in economy, infrastructure and even gender equality (Kanagawa and Nakata, 2008).
In Assam, India, Kanagwa and Nakata (2008) found that education plays a vital role in reducing poverty levels, as well as developing the infrastructure, economy and gender equality in a village.
In South Africa, it was reported that electrification benefitted students as it allowed teaching to continue into the evening (Davidson & Mwakasonda, 2004). A similar observation was noted in India as children were receiving almost three extra hours of study a day due to extended lighting hours (Chakabarti & Chakabarti, 2002). Moreover, Oda and Tsujita (2011) found an improvement in students’ performances and regarded it to their enhanced concentration due to air conditioning and better lighting in classrooms. This observation is similar to that seen in South Africa, as more computers and equipment were added to schools, making teaching much more efficient.
Add more explanation and graph about schools
Regarding the economic benefits, the combined delivery of electricity and education has been reported to double the income of a household than if either service was delivered independently (Cabraa et al., 2005). The number of illiterate people as reported by the UN Educational, Scientific and Cultural Organisation (UNESCO) had decreased from 5.28 million in 1996 to 2.28 million in 2015, with 95% of them being over the age of 15. Although electricity may not be the direct cause of this, a comprehensive study has found that electricity consumption per capita in developing countries has a direct positive correlation with the education index, which is a ….. (Kanagawa and Nakata, 2008).
6.1.2 Health Impacts
Rural electrification has been reported to produce favourable changes in welfare in both India and South Africa. Improvements in health are deemed to be linked to the reduction in usage of traditional energy sources (Oda and Tsujita, 2011) (Spalding-Fecher, 2005) (Aguirre, 2007). The reducing indoor air pollution (IAP) that was previously caused to the use of wood, cool, biomass and paraffin has enabled vaccines to be cold-stored and thus resulted in lower respiratory infections in children (Barnes et al., 2009) (Aguirre, 2007). In a study conducted by Barnes et al., (2009), it was reported that children living in fuel-dependant households are twice as likely to acquire respiratory functions, and that around 1400 under the age of five die from IAP each year. In India, Cabraal et al. (2005) reported a similar observation, except that the incidences of illness among children and women were significantly larger, reaching 500 million each year. This discrepancy could be attributed to India’s larger rural population compared to South Africa.
Moreover, as previously discussed, incomplete combustion of biomass results in toxic emission. In India, chronic respiratory diseases were found in women exposed to biomass smoke in households, resulting in their death rate being similar to that of heavy smokers. In their timely study of IAP, Barnes et al. (2009) concluded that a solution to this is the exclusive use of RETs for electrifying households. However, Spalding-Fecher (2005) argues that this is highly unlikely since an RET like the SHS cannot meet the cooking and heating needs of a household due to its low-capacity. Nevertheless, RET electrification has been linked to a reduction in fires that was previously caused by paraffin or candles (Davidson and Mwakasonda, 2004)
6.1.3 Employment Impacts
In their comprehensive study of the electrification impacts on employment, Chakrabati and Chakrabati (2002) found that the agriculture sector is one that benefitted the most in rural India. Barman et al. (2017) attribute this to the fact that 80% of the rural population was engaged in agricultural activities. Farmers were able to install irrigation pumps for automated watering of their fields, process farming produce over an extended period of time, and thus produce an income gain of around US$171 a year (Barman et al., 2017) (Cook, 2011) (Cabraal et al., 2005). The same study reported that electrification also enabled farmers to access the internet and further educate themselves about their profession and its position in the market, and thus produce higher quality products. Moreover, there was a reported increase in sale opportunities for the SHS, as locals began to realise its potential of providing better quality lighting than kerosene (ibid.) These results show that not only does electrification impact existing businesses, but also encourages entrepreneurs to enter the market (Oda and Tsujita, 2011).
In India, the rural population depends mainly on agriculture-based activities for its income, with around 80% of villagers working in the sector. A number of studies indicate that the agricultural sector was the sector that benefitted the most, as farmers were reportedly able to introduce irrigation pumps into their fields, process farming produce for an extended period, and thus generate a higher income (Cook, 2011) (Barman et al., 2017). Cabraal et al. (2005) reports an income gain of around US$171 a year for Indian villagers. The same study found that electrification enabled farmers to access the internet, allowing them to further educate themselves about the local market, and thus produce higher quality products with a competitive price. Moreover, there was reportedly an increase in sale opportunities of SHS as locals began to realise its potential in providing lighting of better quality than kerosene (ibid.). These results show that not only does rural electrification impact existing businesses, but also encourages entrepreneurs to enter the market (Oda and Tsujita, 2011).
In South Africa, Dinkelman (2008) found that women’s employment rate rose by 13.5% after electrification, but there was no significant impact on male labour employment. This finding differs to that of Khandker (2012), who found a positive impact on both men and women, with an increase of 1.5% and 17% respectively.
In India, Raman et al. (2012) found that with each 1MW of PVMG installed, an average of 37 jobs were created. Similarly, the International Renewable Energy Agency reported that 72,000 new job opportunities were created from off-grid solar PV applications in 2015.
An abundance of literature were found on the electrification impacts on employment in India, as opposed to South Africa. This can be attributed to the fact that South Africa’s focus has been mainly on SHS, which is a much lower capacity RET than PVMG and cannot support extra activities that would increase income.
Nevertheless, an in-depth statistical study conducted in rural Sub-Saharan Africa and South Asia found that the decrease in biomass dependence led to a significantly higher average household income. With a higher income, the better potential RET electrification becomes the primary energy supply as people can afford it