Integrated Approach to Rural Energy Development

1
Integrated Approach to Rural Energy Development

• A Government-Enabled, Market-Based Paradigm
• Enabling Private Sector Participation in Rural
  Energy Development

2
Rural development for poverty eradication

• Addressing hunger, food security employment
• Improve agricultural production food
  nutrition security
• Diversify towards rural non-farm activities
  incomes
• Promote urban-rural linkages
•  
• Agriculture development trends
• Commercialization of agricultural production
• Liberalization of agricultural trade
• Improvement of efficiency quality of
  agricultural production
• Diversification into high value agricultural
  items.
• Social development
• Access to education, health social services
• Social integration

• Will redefine create new types of energy needs
  services
• Will require improved or modern energy end-use
  devices
• Will involve new projections of energy demand

3
MODERN RURAL ENERGY SYSTEM
Rural Energy Supply
Modern Rural Energy Demand

• Will require more of the improved and modern
  energy supply systems to use existing primary
  energy sources
• Will involve new approaches mechanisms for
  providing these modern energy supply systems in
  rural areas

4
Highest Level of Integration Conventional
energy sector integration with partial
environmental rural development integration
5
Challenges in integrating energy and rural
development

• Overcoming lack of scale and difficulty of access
  
• The small scale and wide geographical spread of
  rural settlements pose particular problems for
  meeting their development needs.
• Satisfying basic and productive energy needs
• The high incidence of rural poverty and low
  income levels of the rural people mean that
  satisfying basic energy needs is much more
  critical in the rural context.
• Meeting energy needs of the poor
• The real challenge in meeting the energy needs
  of the rural poor is, of course, to remove or
  mitigate the conditions that perpetuate poverty.
  
• Developing energy self-reliance
• There are limits beyond which self-sufficiency
  cannot be pursued, economic development can
  strengthen rural self-reliance by providing the
  means to access external energy options.
• Managing rural energy transitions
• Modernizing rural energy supplies means a higher
  degree of monetization of rural energy markets
  and of rural economies as a whole.
• Enhancing energy technology absorption
  capabilities
• Rural energy users are required to not only
  adopt sophisticated technologies, but to also
  learn to operate, maintain and utilize them
  effectively. Equipping them to accept such
  multiplicity of roles is a major aspect of rural
  energy development.
• Ensuring the sustainability of biomass energy
  sources
• This calls for a close understanding of the
  interrelationship between biomass production
  processes and end-use activities, both for energy
  and non-energy applications, also, more
  importantly, land use changes.

6
Challenges

• Re-thinking
• Re-orientation
• Adoption

7
Strategic Planning Management (SPM)

• An approach by which Governments stakeholders
  take a long-term view of trends in natural
  resources use management social quality,
  identify the changes necessary to bring these
  trends within sustainable limits to establish a
  management framework to encourage key groups in
  society to achieve these goals.

8
Strategic Planning Management (SPM)Key Features
9
Traditional vs SPM of Energy Resources
10
Strategic Planning Management (SPM)Five-Step
Approach
11
Defining a vision for sustainable integrated
rural energy development

• Providing least cost energy services to meet
  ultimate developmental goals
•  
• Developing a long-term perspective of the rural
  energy transition
•  
• Managing technology dissemination
•  
• Enabling new rural energy markets

12
Providing least cost for energy and rural
development

• Need to understand energy uses match them most
  efficient resource-technology combinations
• Need to recognize priorities among end-uses to
  make appropriate policy decisions (e.g. , which
  users what end-uses deserve subsidies)
• Need to be development oriented to establish or
  reinforced crucial links between rural energy
  systems rural development
• Make these concepts part of national strategy
  need to reorient policies, plans implementation
  mechanisms
• Need to define a set of development criteria
  against which the progress of rural energy
  systems should be measured
• Ensure that focus on physical infrastructure for
  energy production and consumption does not
  dominate rural energy development

13
The Rural Energy Transition
Short/Medium Term
Medium/Long Term

• Conventional rural energy strategies are unable
  to proceed beyond the belief that more of modern
  energy is good
• Search for improved fuels technologies
  largely determined to what is currently readily
  available, rather than by what is conceivable in
  the longer term

14
Technology Dissemination Plan

• Need to see technology dissemination in a wider
  context that technology penetration
• Need to reduce level of technology dependence, as
  most technologies results from RD activities in
  industrialized countries
• Need to move beyond commercialization of
  technology to acquiring technology manufacturing
  capabilities
• Further beyond, need to develop capabilities for
  new technology innovation

15
Enabling Rural Energy Markets

• Need to create new energy markets in which all
  technological options compete freely than at
  present
• Ensure developmental accountability for rural
  energy systems evolving in such markets
• Need for policies an indicative planning
  process that set rules for existing new market
  players to conform
• Need for rural energy planning to deviate as tool
  for government decision-making, instead
• Planning need to become a statement of desired
  results that should be brought about through
  market mechanisms

A Government-Enabled, Market-Based Paradigm
16
Balancing Governments Markets

• Identify enhance government role where market
  mechanisms are incapable important development
  concern
• Create mechanisms for government intervention as
  environmental social costs are outside market
  valuation
• Reflect true value of energy scarcity thus
  promoting sustainability of natural resource base
• Need to achieve human development goals without
  compromising market efficiency criteria
• Develop long-term rural energy markets
  independent of direct government intervention,
  but held accountable for development
  responsibility based on framework rules set by
  government

17
Planning for MarketsA Government-Enabled,
Market-Based Planning Approach

• Indicative planning set out broad directions
  for market development without stifling
  initiative innovation by players
• Market development will be induced by indirect
  policy interventions rather than direct control
• Key developmental indicators as measures of
  progress to rationalize policy changes plan
  revisions

18
Operationalizing the Government-enabled
Market-based Approach

• Ensure that rural energy planning should be part
  of the rural development planning sequence
• Ensure upstream linkages of planning with policy,
  its downstream linkages with programs and
  projects
• Planning is not a self-contained sequence of
  analytical task but one major component of a
  complex choice

19
Operationalizing the Government-enabled
Market-based Approach

• Ensure horizontal linkages between rural energy
  planning planning for other sectors of the
  economy including environment

20
Operationalizing the Government-enabled
Market-based Approach

• Ensure vertical linkages in the planning process
  and emphasized equally the downwards and upwards
  flows of information and decisions
• Centralized planning at macro-level and
  de-centralized planning at lower levels should be
  viewed as mutually independent activities with
  neither being sufficient by itself.

21
Vertical Horizontal Linkages in Rural Energy
Planning
National Development Planning Body National
Energy Planning Body Sectoral Planning Bodies
Perspective Plan for Rural Energy Market
Development Integration with Rural Development
Plan Integration with National Energy Plan
NATIONAL LEVEL
Area-Based Biomass and Renewable Energy Resource
Potential Assessment Area-Based Socio-Economic
Status Indicators Development Area-Based
Environmental Status Indicators
Development Integration with Rural
Electrification and Other Conventional Energy
Supply Development Programs Integration with
Forestry Programs Integration with Other Biomass
Energy Agricultural Programs Integration with
Rural Development Programs
Conventional Energy Supply Utilities Specialized
Agencies for Rural Energy Development Specialized
Agencies for Rural Development Specialized
Agencies for Forestry Development Specialized
Agencies for Agricultural Development
STATE/ PROVINCE LEVEL
Local Government Branches of Conventional Energy
Supply Utilities Branches of Specialized
Agencies for Decentralized Renewable Energy
Development Private Sector Firms
Site Identification for Decentralized Renewable
Energy Systems Detailed Rural Energy Market
Surveys and Market Definitions Formulation of
Rural Energy Programs/ Projects Integration with
Rural Development Programs/Projects
Government Implementing Agencies Non-Governmental
Organizations Private Sector Firms Rural
Communities
VILLAGE/ VILLAGE CLUSTER LEVEL
Rural Energy Project Planning Mobilization of
Community Participation
22
Operationalizing the Government-enabled
Market-based Approach

• View energy as a service to achieve rural
  development objectives
• Recognized energy inflows from centralized supply
  facilities
• All types of energy systems conventional,
  non-conventional traditional should be
  integral in the planning process

23

• Food security employment
• Improve agricultural production food
  nutrition security
• Diversify towards rural non-farm activities
  incomes
• Promote urban-rural linkages
•  
• Agriculture development
• Commercialization of agricultural production
• Liberalization of agricultural trade
• Improvement of efficiency quality of
  agricultural production
• Diversification into high value agricultural
  items.
• Social development
• Access to education, health social services
• Social Integration

Energy Supply Systems
Energy Services
Rural Development
24
Integrated Rural Energy Planning Process
Monitoring, Evaluation and Feedback
25
Work for an enabling policy framework

• Recognize the range of policies concerning
  various aspects of national and rural development
  influence decision in rural energy choices.
• Allows government to orchestrate rural energy
  development without needing to play al the
  instruments

26
STAKEHOLDERS IN RURAL ENERGY DEVELOPMENT
27
Integrated Rural Energy Development

• Provides an approach to build an energy future in
  close cooperation with all relevant players,
  focusing on long-term benefits in social,
  economic ecological terms
•  
• Benefits
• A clear sense of direction for 15 to 25 years
  into the future.
• Commitment of relevant stakeholders.
• Investment security due to long-term
  arrangements.
• Integral assessment of alternative energy
  scenarios.
• Cost-effective measures where possible.
• Demand-side and supply-side management.
• Rural electrification as an integral element of
  the national plan.
• Provision of energy services to the poor.
• Reduction of negative health impact due to
  cleaner air. 

28
Integrated Approach to Rural Energy Development

• A Government-Enabled, Market-Based Paradigm
• Enabling Private Sector Participation in Rural
  Energy Development

29
Rural development for poverty eradication

• Addressing hunger, food security employment
• Improve agricultural production food
  nutrition security
• Diversify towards rural non-farm activities
  incomes
• Promote urban-rural linkages
•  
• Agriculture development trends
• Commercialization of agricultural production
• Liberalization of agricultural trade
• Improvement of efficiency quality of
  agricultural production
• Diversification into high value agricultural
  items.
• Social development
• Access to education, health social services
• Social integration

• Will redefine create new types of energy needs
  services
• Will require improved or modern energy end-use
  devices
• Will involve new projections of energy demand

30
MODERN RURAL ENERGY SYSTEM
Rural Energy Supply
Modern Rural Energy Demand

• Will require more of the improved and modern
  energy supply systems to use existing primary
  energy sources
• Will involve new approaches mechanisms for
  providing these modern energy supply systems in
  rural areas

31
Highest Level of Integration Conventional
energy sector integration with partial
environmental rural development integration
32
Challenges in integrating energy and rural
development

• Overcoming lack of scale and difficulty of access
  
• The small scale and wide geographical spread of
  rural settlements pose particular problems for
  meeting their development needs.
• Satisfying basic and productive energy needs
• The high incidence of rural poverty and low
  income levels of the rural people mean that
  satisfying basic energy needs is much more
  critical in the rural context.
• Meeting energy needs of the poor
• The real challenge in meeting the energy needs
  of the rural poor is, of course, to remove or
  mitigate the conditions that perpetuate poverty.
  
• Developing energy self-reliance
• There are limits beyond which self-sufficiency
  cannot be pursued, economic development can
  strengthen rural self-reliance by providing the
  means to access external energy options.
• Managing rural energy transitions
• Modernizing rural energy supplies means a higher
  degree of monetization of rural energy markets
  and of rural economies as a whole.
• Enhancing energy technology absorption
  capabilities
• Rural energy users are required to not only
  adopt sophisticated technologies, but to also
  learn to operate, maintain and utilize them
  effectively. Equipping them to accept such
  multiplicity of roles is a major aspect of rural
  energy development.
• Ensuring the sustainability of biomass energy
  sources
• This calls for a close understanding of the
  interrelationship between biomass production
  processes and end-use activities, both for energy
  and non-energy applications, also, more
  importantly, land use changes.

33
Challenges

• Re-thinking
• Re-orientation
• Adoption

34
Strategic Planning Management (SPM)

• An approach by which Governments stakeholders
  take a long-term view of trends in natural
  resources use management social quality,
  identify the changes necessary to bring these
  trends within sustainable limits to establish a
  management framework to encourage key groups in
  society to achieve these goals.

35
Strategic Planning Management (SPM)Key Features
36
Traditional vs SPM of Energy Resources
37
Strategic Planning Management (SPM)Five-Step
Approach
38
Defining a vision for sustainable integrated
rural energy development

• Providing least cost energy services to meet
  ultimate developmental goals
•  
• Developing a long-term perspective of the rural
  energy transition
•  
• Managing technology dissemination
•  
• Enabling new rural energy markets

39
Providing least cost for energy and rural
development

• Need to understand energy uses match them most
  efficient resource-technology combinations
• Need to recognize priorities among end-uses to
  make appropriate policy decisions (e.g. , which
  users what end-uses deserve subsidies)
• Need to be development oriented to establish or
  reinforced crucial links between rural energy
  systems rural development
• Make these concepts part of national strategy
  need to reorient policies, plans implementation
  mechanisms
• Need to define a set of development criteria
  against which the progress of rural energy
  systems should be measured
• Ensure that focus on physical infrastructure for
  energy production and consumption does not
  dominate rural energy development

40
The Rural Energy Transition
Short/Medium Term
Medium/Long Term

• Conventional rural energy strategies are unable
  to proceed beyond the belief that more of modern
  energy is good
• Search for improved fuels technologies
  largely determined to what is currently readily
  available, rather than by what is conceivable in
  the longer term

41
Technology Dissemination Plan

• Need to see technology dissemination in a wider
  context that technology penetration
• Need to reduce level of technology dependence, as
  most technologies results from RD activities in
  industrialized countries
• Need to move beyond commercialization of
  technology to acquiring technology manufacturing
  capabilities
• Further beyond, need to develop capabilities for
  new technology innovation

42
Enabling Rural Energy Markets

• Need to create new energy markets in which all
  technological options compete freely than at
  present
• Ensure developmental accountability for rural
  energy systems evolving in such markets
• Need for policies an indicative planning
  process that set rules for existing new market
  players to conform
• Need for rural energy planning to deviate as tool
  for government decision-making, instead
• Planning need to become a statement of desired
  results that should be brought about through
  market mechanisms

A Government-Enabled, Market-Based Paradigm
43
Balancing Governments Markets

• Identify enhance government role where market
  mechanisms are incapable important development
  concern
• Create mechanisms for government intervention as
  environmental social costs are outside market
  valuation
• Reflect true value of energy scarcity thus
  promoting sustainability of natural resource base
• Need to achieve human development goals without
  compromising market efficiency criteria
• Develop long-term rural energy markets
  independent of direct government intervention,
  but held accountable for development
  responsibility based on framework rules set by
  government

44
Planning for MarketsA Government-Enabled,
Market-Based Planning Approach

• Indicative planning set out broad directions
  for market development without stifling
  initiative innovation by players
• Market development will be induced by indirect
  policy interventions rather than direct control
• Key developmental indicators as measures of
  progress to rationalize policy changes plan
  revisions

45
Operationalizing the Government-enabled
Market-based Approach

• Ensure that rural energy planning should be part
  of the rural development planning sequence
• Ensure upstream linkages of planning with policy,
  its downstream linkages with programs and
  projects
• Planning is not a self-contained sequence of
  analytical task but one major component of a
  complex choice

46
Operationalizing the Government-enabled
Market-based Approach

• Ensure horizontal linkages between rural energy
  planning planning for other sectors of the
  economy including environment

47
Operationalizing the Government-enabled
Market-based Approach

• Ensure vertical linkages in the planning process
  and emphasized equally the downwards and upwards
  flows of information and decisions
• Centralized planning at macro-level and
  de-centralized planning at lower levels should be
  viewed as mutually independent activities with
  neither being sufficient by itself.

48
Vertical Horizontal Linkages in Rural Energy
Planning
National Development Planning Body National
Energy Planning Body Sectoral Planning Bodies
Perspective Plan for Rural Energy Market
Development Integration with Rural Development
Plan Integration with National Energy Plan
NATIONAL LEVEL
Area-Based Biomass and Renewable Energy Resource
Potential Assessment Area-Based Socio-Economic
Status Indicators Development Area-Based
Environmental Status Indicators
Development Integration with Rural
Electrification and Other Conventional Energy
Supply Development Programs Integration with
Forestry Programs Integration with Other Biomass
Energy Agricultural Programs Integration with
Rural Development Programs
Conventional Energy Supply Utilities Specialized
Agencies for Rural Energy Development Specialized
Agencies for Rural Development Specialized
Agencies for Forestry Development Specialized
Agencies for Agricultural Development
STATE/ PROVINCE LEVEL
Local Government Branches of Conventional Energy
Supply Utilities Branches of Specialized
Agencies for Decentralized Renewable Energy
Development Private Sector Firms
Site Identification for Decentralized Renewable
Energy Systems Detailed Rural Energy Market
Surveys and Market Definitions Formulation of
Rural Energy Programs/ Projects Integration with
Rural Development Programs/Projects
Government Implementing Agencies Non-Governmental
Organizations Private Sector Firms Rural
Communities
VILLAGE/ VILLAGE CLUSTER LEVEL
Rural Energy Project Planning Mobilization of
Community Participation
49
Operationalizing the Government-enabled
Market-based Approach

• View energy as a service to achieve rural
  development objectives
• Recognized energy inflows from centralized supply
  facilities
• All types of energy systems conventional,
  non-conventional traditional should be
  integral in the planning process

50

• Food security employment, poverty eradication
• Improve agricultural production food
  nutrition security
• Diversify towards rural non-farm activities
  incomes
• Promote urban-rural linkages
•  
• Agriculture development
• Commercialization of agricultural production
• Liberalization of agricultural trade
• Improvement of efficiency quality of
  agricultural production
• Diversification into high value agricultural
  items.
• Social development
• Access to education, health social services
• Social Integration

Energy Supply Systems
Energy Services
Rural Development
51
Work for an enabling policy framework

• Recognize the range of policies concerning
  various aspects of national and rural development
  influence decision in rural energy choices.
• Allows government to orchestrate rural energy
  development without needing to play al the
  instruments

52
STAKEHOLDERS IN RURAL ENERGY DEVELOPMENT
53
Integrated Rural Energy Development

• Provides an approach to build an energy future in
  close cooperation with all relevant players,
  focusing on long-term benefits in social,
  economic ecological terms
•  
• Benefits
• A clear sense of direction for 15 to 25 years
  into the future.
• Commitment of relevant stakeholders.
• Investment security due to long-term
  arrangements.
• Integral assessment of alternative energy
  scenarios.
• Cost-effective measures where possible.
• Demand-side and supply-side management.
• Rural electrification as an integral element of
  the national plan.
• Provision of energy services to the poor.
• Reduction of negative health impact due to
  cleaner air. 

54
INTEGRATING ENERGY AND RURAL DEVELOPMENTDecentral
ized Approach

• enhanced participation of the rural population
  and local community groups to produce a
  bottom-up as opposed to top-down mode of
  decision-making
• downplay the importance of target setting (and,
  by implication, target-chasing)
• match more closely peoples needs with their own
  cultural preferences and aspirations as well as
  their ability for self-help
• close affinity between the rural population the
  environment in which they live is far more likely
  to be recognized as a key component of
  decision-making and planning processes