Sustainability and development impacts of off-grid electrification in developing countries : An assessment of South Africa's rural electrification program

Abstract: Previous studies have shown that provision of sustainable electricity supply to rural households is essential to bring development to off-grid populations. For this reason, most developing countries put large efforts into rural electrification programs to stimulate development and reduce poverty. However, to be sustainable these programs need to recover costs, which poses a challenge to remote low income populations.  This often forces governments and other institutions involved in rural electrification to subsidize the electricity production. It also affects the choice of technology and places a barrier on the level of energy provided in line with the ability to pay for services. As a result of this, most programs have failed to achieve the desired objectives, as the technologies used often do not support income generating activities that could increase the payment capabilities of the beneficiaries and contribute to development.This thesis is focused on the rural electrification program of South Africa, the country in sub-Saharan Africa that has the highest access to electricity. It investigates the success elements that influence the sustainability of rural electrification programs and their contributions to socio-economic development. This was achieved by evaluating the South African program that provides solar home systems to off-grid communities, and a hybrid solar-wind mini-grid project in South Africa. The study also draw lessons from other rural electrification programs in neighbouring countries, i.e. an evaluation of a hybrid solar-diesel mini-grid system in Namibia, and a review of two systems, a hybrid solar-biomass mini-grid project in Botswana and a hydro mini-grid program in Lesotho. The study revealed that hydro based hybrid mini-grid systems provide the most cost effective way of bringing energy services to rural settlements. Regardless of technology, successful programs depend on adequate support from the government, implementation of a progressive tariff system that allows the high consuming high income earners and businesses, to cross subsidize the low consuming , low income users. It shows that it is more likely for rural electrification programs to survive if the design considers the existing businesses, population growth and the corresponding load increase. The thesis further shows that provision of sufficient energy to induce income generating activities is essential to decrease the need for subsidies and to ensure the sustainability of programs. In addition, availability of spare parts and a capable management team is essential for the successful operations and maintenance of these systems.