Remote rural electrification projects in the poorer parts of the world used to be achieved with the use of diesel engine generators. These are increasingly being replaced with decentralized, on-site stand alone and renewable energy-based hybrid power systems. Paula Llamas of the Alliance for Rural Electrification reports.

Roughly 1.3 billion people in rural areas, mainly within developing countries, live without electricity. Rural electrification is therefore an issue that should be high on rural development agendas.

Renewable energy technologies (RETs) have an important role to play in rural areas in terms of the suitability and cost competitiveness of the existing technological solutions, and from an environmental point of view. Renewables are gaining widespread support, notably in the developing world. Climate change will affect everyone, but it is expected to have a greater impact on those living in poverty in developing countries as a result of changes in rainfall patterns, increased frequency and severity of floods, droughts, storms, heat waves, changes in water quality and quantity, sea level rise and glacial melt.

On-grid and off-grid renewable applications are currently available to produce electricity, with off-grid being a flexible and easy-to-use solution to increase electrification rates in rural areas where, due to their remoteness and low levels of population, the extension of the grid is often economically unfeasible.

Off-grid rural electrification

Decentralized (off-grid) rural electrification is based on the installation of stand alone systems – photovoltaic (PV), wind, small-scale hydropower, biomass – in rural households, or the setting up of electricity distribution mini-grids fed either by renewables or mixed (renewables–LPG/diesel) systems.

The off-grid technology options based on renewable energies are varied in terms of scale and services provided, but they all have a number of important common features, which make them more attractive than the conventional options – systems based on diesel or the use of candles, oil, kerosene lamps and lanterns.

Primarily, RETs allow for the optimization of the use of indigenous natural resources. The power is generated on site, thereby avoiding transmission losses and long distribution chains and satisfying energy demand directly. The standardization and modularity of the technology (for example PV systems) provides a high degree of flexibility to adapt to different locations and environments and at the same time allows the installed technology to be scaled up when demand increases. Furthermore, the simple installation and maintenance combined with minimal running costs, facilitate local training and income generation opportunities, which in turn guarantee the sustainability of the system. Another important feature to take into account is the cost competitiveness of RETs compared with the conventional options on a life cycle basis.

When it comes to rural communities, the costs of electrifying small villages through the extension of the grid are frequently very high; the lack of critical mass, the distances to the grid and the type of terrain to be crossed are key factors in these costs. In addition, residential electricity prices on rural electricity grids require high levels of consumption in order to make electricity supply economically viable. To reach a high level of consumption requires that consumers have sufficient disposable income to afford appliances that use significant amounts of power, such as numerous light fittings, refrigerator, fridge freezer, TV, and so on. Where these levels of consumption are not found, electricity supply through the grid is economically unviable.

Diesel fuel-based power systems are no longer an attractive option – their elevated operating costs and high maintenance, the geographical difficulties of delivering the fuel to rural areas and the environmental and noise pollution they cause all count against them. The low operation and maintenance costs, as well as the non-existent fuel expenses and the increased reliability, together with a longer expected useful life of renewable energy technologies, usually offset initial capital costs. The reality is that RETs are cost competitive for rural electrification, even without internalizing environmental costs.

Many renewable energy technologies are used extensively within rural communities for different applications such as household and public lighting, telephone and internet, refrigeration of medicines, irrigation and water purification, drying and food preservation, crop processing and so on. Solar pumping and hybrid village electrification systems are two examples.

Solar pumping technology for water supply

According to the 2006 Human Development Report of the United Nations Development Programme (UNDP), 1.2 billion people have no access to safe water and 2.6 billion live without access to sanitation. Millions of women and young girls are forced to spend hours collecting and carrying water, restricting their opportunities and their choices. The effects are felt most in rural areas where access to drinking water as well as to irrigation services for agricultural purposes and livestock are a basic milestone that could improve quality of life and economic development.

Installation of PV water pump systems
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Direct solar pumping technology is one of the most suitable technologies that can be used to provide water supply in rural areas, where a steady fuel supply is problematic and skilled maintenance personnel are scarce.

The modular nature of PV generators means that installations can be redesigned to meet an increase in demand; PV water systems can also be easily moved with little dismantling and low reinstallation costs – see Figure 1. This technology is also highly efficient – direct solar pumping technology covers applications ranging from 500–1500 m3/day – requires minimal maintenance and, of course, doesn’t use fossil fuels. Since 1994 around 24,000 solar pumping systems have been installed worldwide providing drinking water to several thousand households and community services (health clinics, schools and the like), as well as irrigation services. Gambia, Tunisia and Algeria are some of the locations that have benefited from this technology. By the year 2010, the EU predicts that 150,000 photovoltaic pumps will have been installed.

Figure 1. The flows of energy go from the PV generator through the control unit to the pump. The flow of water goes from the well to the water tank and then to the distribution systems. Source: ISOFOTON
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Hybrid power systems for village electrification

A combination of different but complementary energy supply systems based on renewable energies or mixed (RET–LPG/diesel), is known as a hybrid system – see Figure 2.

Figure 2. A typical hybrid system combines two or more energy sources, from renewable energy technologies, such as photovoltaic panels, wind or small hydro turbines, and from conventional technologies, usually diesel or LPG generators (though biomass fed gensets are also a feasible option). In addition, it includes power electronics and electricity storage batteries.
Source: SMA
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Hybrid systems capture the best features of each energy resource and can provide ‘grid-quality‘ electricity with a power range between several kilowatts and several hundred kilowatts. This combined technology can be use for a range of applications, from village electrification to professional energy solutions such as telecommunication stations or emergency rooms at hospitals, and as a backup to the public grid in case of blackouts.

Hybrid systems are integrated in small electricity distribution systems (mini-grids) and can be incorporated into both available and planned structures, as replacements for diesel mini-grid systems. Retrofitting hybrid power systems to the existing diesel-based plants will significantly minimize delivery and transport problems and will drastically reduce maintenance and emissions, representing a more advantageous solution for rural areas. (Even if such systems include a genset as a backup, renewable energy will still supply, at least, between 60%–90% of the energy, with gensets providing as little as 10% of the energy.)

Installation of PV water pump systems
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Technical, economic, financial, and socio-cultural considerations, including a feasibility study based on gathering field data for each specific site and a life cycle cost analysis, must all be integrated in the decision process to ensure the appropriate choice of renewable energy technologies for any given rural area. Hybrid systems have been successfully installed in several remote locations. The access to reliable and affordable electricity has allowed the provision of key services such as lighting, refrigeration, education, communication and health services, thereby enhancing rural societies.

Renewable off-grid markets for rural electrification

Renewable energy sources are widely available throughout the developing world. For example, the East African region boasts enormous potential for wind energy generation due to its favourable climatic conditions. Africa and South East Asia have abundant unexploited potential for small hydropower systems which can supply rural energy demands from small rivers. Africa also has tremendous solar energy capabilities – there is real commercial potential for solar energy to provide rural electrification in remote areas of sub-Saharan Africa and North Africa.

In fact, rural access is already being targeted by countries with a large number of unelectrified communities, such us China – the Township Electrification Programme was finished in 2005 and provided electricity to approximately 1.3 million rural people in 1000 townships with solar PV, small hydro, and a small amount of wind power. In 2005, Sri Lanka electrified 900 off-grid households with small hydro and 20,000 with solar PV. And in India in 2006, the Integrated Rural Energy Programme using renewable energy had electrified 2200 villages. India also has achieved 70 MW of small-scale biomass gasification systems for rural (off-grid) power generation. The Philippines now has some 130 PV-powered drinking water systems and 120 telecommunications systems, with an average capacity of about 1 kW each.

There is significant potential in the off-grid electricity market. Recent estimates for PV alone establish a cumulative installed capacity of 161 MWp for residential off-grid systems, with a growth rate of 17% and 133 MWp for industrial off-grid systems, with a growth rate of 15% (according to Navigant Consulting in 2006), which in turn sets the potential market size at 30 times larger than today’s market!

However, only a limited number of studies and databases are available and reliable when it comes to rural electrification. The lack of up-to-date socio-economic data prevents, among other things, the development of new frameworks for rural electrification and competitive markets, and also limits public and private investment.

Additionally, there are still a number of challenges to face in order to reach a level playing field for rural electricity supply using renewable energies; distortion of prices as the result of public subsides to conventional energies; inappropriate taxation of imported energy equipment and the lack of appropriate financing instruments suited to the scale and the technology involved, among others, are potential blocks to the development of these markets.

Some of the key drivers to encourage the private sector to make significant investments in rural decentralized energy markets will be changes in legislation and regulatory frameworks to favour renewable energies, both at local and national level. Alongside this, international financing institutions need to develop innovative financing options, such as commercial loans or credit schemes, that will assist with initial investment costs and will also permit rural users to afford their electricity.


Renewable energy technologies are ready to play a significant role in the electrification of rural areas, notably within developing countries. PV-powered water systems and hybrid systems are just two examples of a range of technologies that have been developed to increase modern electricity services in rural areas in an environmentally and socio-economically sound manner.

Appropriate support frameworks and financial instruments are needed to remove market distortions and permit long-term sustainability. Furthermore, the engagement of governments and the donor community, such as the World Bank, development banks and development aid from the EU, is crucial to increase the involvement of the private sector. This joining of forces will definitely increase the rates of rural electrification and development.

Paula Llamas is Secretary General of the Alliance for Rural Electrification (ARE), Brussels, Belgium.

The Alliance for Rural Electrification was founded in 2006 in response to the need to provide sustainable electricity to the developing world, and to facilitate the involvement of its members in the emerging rural energy markets. The strength of ARE is its robust industry-based approach, coupled with the ability to combine different renewable energy sources in order to provide more efficient and reliable solutions for rural electrification. ARE, together with its members promotes renewable energy technologies as the most suitable and cost-competitive solution to address the specific energy and water needs in rural areas and dedicates its efforts to generate the appropriate communication tools and materials to carry out this objective. ARE membership is open to all companies and institutions with an interest in the renewable energy field.

PV/diesel hybrid system – Morocco

The village of Akane has a total of 38 households plus community services. The PV hybrid plant, which has been integrated into a community building, consists of a 5.8 kWp PV generator connected to a DC coupled system with a 72 kWh battery, a 7.2 kVA DC–AC inverter and a back-up diesel genset of 8.2 kVA. Four houses are away from the village centre and have been provided with individual PV generators.

The micro-grid was set up in 2006 and provides electricity 24 hours a day to 27 households (approx. 120 inhabitants) and four community services (public lighting, school and community meeting hall and mosque). Each client has an electricity dispenser/meter to limit the demand to the contracted tariff, ie the tariff that the consumer has agreed to pay the operator. The sum of the nominal contracted demands for the village is 13 kWh/day. The technical performance is evaluated with an hourly data logger.

The management of the system follows a community model. A community electricity service operator (users’ association) operates the service, collects fees and contracts external technical assistance when needed. The users’ association has operation and maintenance protocols, and signed service contracts with each user. The tariff is 50 DH/month (Moroccan Dirham/month) (E4.46/month) for the very low demand (275 Wh/day) and 100 DH/month (E9/month) for the low demand (550 Wh/day).

Source/Implementer: Trama TecnoAmbiental

Wind/diesel system – China

The island fishing village of Xiaoqingdao, Rushan, Shandong is 4 km off the shore of the mainland and has a total of 125 families (375 people). The wind/diesel hybrid system dates from 2001 and consists of four 10 kW wind turbines made by BWC; a tower with a height of 36 metres; a 40 kVA 3 phase inverter; a battery bank (211 kWh); with a back up diesel of 30 kW.

Source/Implementer: Bergey Windpower