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Enabling Factors Facilitating an Increase in Access to Electricity in Rural Areas – Fiji as an Example United Nations Development Programme Climate Change.

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Presentation on theme: "Enabling Factors Facilitating an Increase in Access to Electricity in Rural Areas – Fiji as an Example United Nations Development Programme Climate Change."— Presentation transcript:

1 Enabling Factors Facilitating an Increase in Access to Electricity in Rural Areas – Fiji as an Example United Nations Development Programme Climate Change and Energy Access in Island States - International Parliamentary Hearing for Legislators from Island States in the ACP Regions, Port Vila, Vanuatu, 6 ‐ 8 Nov 2009 Thomas Lynge Jensen, Environment and Energy Specialist, UNDP Pacific Centre (PC)

2 Structure of Presentation 1.Energy Services & Human Development 2.Fiji Case 3.Rural Electrification – Enabling Factors 4.Role of Policy Makers 5.References

3 Energy Services & Human Development Energy Services –Are benefits that energy carriers produce for human well being What matters Most for People in Poverty/Hardship 1.The energy service not the source 2.Whether the energy services are accessible, reliable, and affordable Energy Services and Human Development –Lack of access to quality energy services, including from electricity is a situation that constraints the delivery of social services, limits opportunities for people and erodes environmental sustainability –It is clear that without access to adequate quantity and quality of modern energy services, achievement of the MDGs will not be possible

4 Energy Services & Human Development (#2) Main Areas of Policy Action to Achieve the MDGs –Energy for cooking –Electricity for lighting, ICT, and appliances –Mechanical power –Modern fuels for heating

5 Energy Services & Human Development (#3) Rural Electrification Objectives –To assist with poverty/hardship reduction –To assist in the provision of basic social services –To improve the standard of living and increase quality of life –To address local health and safety issues –To assist with economic development including income generation –To assist with the reduction in the number of people migrating to urban areas –To assist with national integration

6 Fiji Case Significant Increase in Access to Electricity in Rural Areas

7 Fiji Case – How? ‘Bringing People to Electricity Supplies’ –Very Little Population Growth –Increasing Urbanization

8 Fiji Case – How? (#2) ‘Brining Electricity to the People’ –A consistent political goal over several decades –Supportive policies In particular a Rural Electrification Policy –A dedicated government institution that focuses on rural electrification Rural Electrification Unit at the Department of Energy –Setting of quantitative access targets –Allocation of recurrent allocations from the national budget Supported by resources from development partners

9 Fiji Case – Lessons Learned The Importance of Political Will and Long-Term Commitment Stand-Alone Diesel Schemes –Been a problematic approach to rural electrification The Main Justification for Rural Electrification is not Income Generation –But a critical component in provision of basic social services, improving the standard of living/quality of life, etc Making Electricity available in Rural Areas is a Formidable Challenge –But possible

10 Rural Electrification – Enabling Factors No Single Way of Achieving Electrification –Either from a financing, implementation or from an technology viewpoint Political Will –Undertaking the challenges of rural electrification will require strong political determination –Where progress in getting modern energy services to the poor has been made, it has usually resulted from political will and appropriate public policies

11 Rural Electrification – Enabling Factors (#2) Policy Framework –A Rural Electrification Policy (REP) is expected to facilitate in the following ways Defining development priorities and standards Establishing regulations and procedures for guiding project implementation and management Developing institutional capacity and facilitating coordination Establishing a legal and financing framework that encourages electrification development in accordance with specified priorities

12 Rural Electrification – Enabling Factors (#3) Legal Framework –In many cases reform of the existing legal framework is needed Many current key laws are old and, at the time they were drafted, rural electrification was not a government priority –A broader framework is needed To support rural electrification delivery models based on state, private and community ownership To facilitate the development and exploitation of indigenous renewable energy sources To provide a platform for attracting donor support and mobilizing private investment

13 Rural Electrification – Enabling Factors (#4) Financing Framework –With a generally low willingness-to-pay and low household savings, rural people are unable to meet the relatively high costs of rural electricity –Therefore if there is to be a large uptake of rural electrification, both loan financing availability and subsidies will be needed. Mechanisms could include Loans to households A Rural Electrification Fund Provide capital subsidies Waive import duties, etc on approved renewable energy equipment

14 Rural Electrification – Enabling Factors (#5) Institutional Framework –A mix of rural electrification delivery models Conventional government owned operations Private sector operations Public-Private-Partnerships Community ownership and co-operatives –A dedicate agency to mange and promote rural electrification Establish electrification targets & prepare master plans for achieving the targets Establish rural electrification subsidy policies Issue and administer licenses for rural electrification supplies Monitor and evaluate the progress

15 Rural Electrification – Enabling Factors (#6) Electricity Pricing –Problems with a Uniform National Tariff Effectively prevented/slowed the development of grid systems to areas where the national utility does not maintain a subsidized grid –Flexibility in the Setting of Tariffs is Needed Such would better stimulate new electrification projects, and improve the sustainability of existing systems

16 Rural Electrification – Enabling Factors (#7) Technical Framework –Three Basic Electricity Delivery Configurations Off-grid, mini-grid and grid –Some of the Available Electrification Technologies Generating- Types Off-gridMini-gridGrid- connected Solar PV+++ Wind+++ PV-wind hybrids++ Biomass Steam+ Pico/Microhydro++ Mini-Hydro+ Large Hydro+ Geothermal+ Diesel/Gasoline Generator +++

17 Rural Electrification – Enabling Factors (#8) –Findings from WB Assessment (2007) Renewable energy is more economical than conventional generation for off-grid (less than 5 kW) applications Several renewable energy technologies are potentially the least-cost mini-grid (5-500 kW) generation technology Conventional power generation technologies remain more economical for most large grid-connected applications (even with increases in oil price forecasts) –These Findings Suggests Scale is a critical aspect affecting the economics of different generation configurations Choosing generation technologies and electrification arrangements are becoming a more complicated process

18 Rural Electrification – Enabling Factors (#9) –Technical Standards The electricity industry in many countries has, until now, centered on urban electrification and associated technical standards In rural areas, though, there are a number of situations where application of appropriate technical standards would lead to lower costs without compromising safety –However Developing the energy technologies needed seem to present less of a challenge than mustering the political will and developing the human capacity to employ them effectively

19 Role of Policy Makers Role of Policy Makers in the Energy Sector –It is vital that policy-makers recognize the contribution that modern energy services could make to sustainable development And fund it accordingly –The role of government is an important one As only they can create the right policy environment –Success depends on developing the right mix of frameworks and mechanisms

20 References ADB, Republic of the Fiji Islands: Rural Electrification Project, April 2005 EC & UNDP, Energy as Tool for Sustainable Development for African, Caribbean and Pacific Countries, 1999 ESMAP, Technical and Economic Assessment of Off-grid, Mini-grid and Grid Electrification Technologies, Technical Paper, 121/07, December 2007 Jensen, Thomas L., Energy and Poverty in the Pacific Island Countries – Challenges and the Way Forward, Pacific Regional Energy Officials Meeting, Tonga, 20-22 April 2009 Jensen, Thomas L., A Comparative Analysis of Experiences with Expanding Energy Services for the Poor in Asia-Pacific - Case Study of the Fiji Rural Electrification Programme, 2 Draft Version, Nov 2009 SOPAC, Review of Solomon Islands Electricity Act and Rural Electrification Framework, 2006 UNDP, Energy for Sustainable Development – A Policy Agenda, 2002 UNDP, World Bank & ESMAP, Energy Services for the Millennium Development Goals, UN Millennium Project, 2005 UNDP, Energy and Poverty in the Pacific Island Countries – Challenges and the Way Forward, 2007 UNESCO, Solar Photovoltaic Project Development, 2003

21 Thank you

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