In remote areas of developing countries, access to sustainable energy systems remains often unaffordable for inhabitants. Therefore, special energy supply models and regulatory frameworks adapted to the context of off-grid rural areas need to be implemented to support the dissemination of these systems. This presentation explores how regulators can set a framework for cost-effective and sustainable rural energy services in remote areas. Energy supply models in rural areas can rely on various forms of ownership. Notably, it seems that a well-articulated public-private partnership can contribute to deliver cost-effective energy services.

1. Off-Grid Regulation: How to Provide Cost-effective and Sustainable Rural Energy Services in Remote Areas of Developing Countries? Leonardo Webinar – 29 th May 2009 Dr. Xavier LEMAIRE, Research Fellow Centre for Management under Regulation, Warwick Business School Sustainable Energy Regulation Network/REEEP

4. Electrification rate by region

5. Number of people without electricity is far from decreasing…

6. High disparity between continents

9. Vicious circle resulting of lack of regulation  power reform? Lack of investment in network and rural areas Poor maintenance Poor quality of service/pricing Lack of control Unauthorised Connection / Low energy tariff = Non efficient energy appliances Lack of financial return for electric companies Increase of consumption = increase of financial gap Priority power generation in urban areas Consumption subsidised

12. Source: World Bank/ESMAP, 2008.

14. Grid PV compete with conventional energies?

16. Change of paradigm for renewable energy Source: Annual Rev. Ener. Envt, 2002

22. Rural Concessions in South Africa

30. Combination of mini-grid & individual systems Minimum costs Source: WordPower, 2000

31. Long term comparison of total costs High operating costs Diesel systems Solar Home Systems High investment costs Low operating costs Low investment costs = genset N+20 or even N+30 N+20 or even N+30 $ $ batteries Long-term integrated comparisons Life cycle costing

33. Institutional arrangement Rural electrification agency / fund (Function of) independent regulator ESCOs ESCOs FUNCTIONS Defines rules for competition (tariff for RE); Integrated planning; Standards Operational measures (energy surveys) and funding/bundling (loans, grants) notably CDM Install, collect fees AND guarantee functioning of sustainable energy systems Variety of approach possible for institutional design. But all functions needs to be covered and clear definition of who is responsible of what Delegation / sub-contracting? ESCOs Control standards and tariffs Control standards and tariffs x x x x xxx x x xx x x x x xx xxx xx x xxx x xx end-users Same entity responsible for installation AND maintenance of a system Regulation by the national electricity regulator with a specialised department OR Regulation by the government entity that provides installation subsidies complaints ? ?