Impacts of Electrification with Renewable Energies on Local Economies

Abstract

For India it is crucial to promote rural electrification to raise the well-being of the people in its rural areas, which have a larger number of population and households than its urban areas. In rural areas of India, two types of electrification are in progress. One is the electrification through connecting to conventional grid. The other is the electrification with renewable energies such as solar, biomass, hydro and so on. Many studies prove positive socio-economic impacts of the electrification with renewable energies in rural areas of developing countries including India. However, are there any significant characteristics in socioeconomic impacts of the electrification with renewable energies? The interest of the study is particularly its impacts on local economies such as the creation of new businesses and jobs, agricultural and other productive activities, and household income. The study investigated quantitatively and qualitatively the impacts of two types of electrification on local economies by conducting the interview survey in two grid connected villages and two solar mini-grid villages in Sundarbans, State of West Bengal, India, and then compared these results in two types of villages to identify significant characteristics in the impacts on local economies in solar mini-grid villages compared with grid connected villages.First of all, the study found that there are positive impacts of electrification on local economies regardless of the types of electrification. Regarding the significant characteristics in the impacts of solar mini-grid electrification on local economies, the study found that: first the share of the households whose primary occupation is small business is significantly larger in solar mini-grid villages than in grid connected villages; second the electricity is not used for agriculture in solar mini-grid villages because of the small capacity of solar power plants; and third an increase of household income after electrification is significantly larger in solar mini-grid villages than in grid connected villages. The study also found that the shares of households without access to electricity even after their villages were electrified are significantly large and furthermore they are much larger in solar mini-grid villages than in grid connected villages. The coexistence of electrified and unelectrified households in the electrified village must be a problematic issue that should be addressed. Nevertheless, the most important finding in the study is that solar energy is able to provide the required energy for development of local economies in the form of markets, powering the schools, health centers etc.

The Effects of Rural Electrification on Quality of Life: A Southeast Asian Perspective

“…Apart from the preceding sections, there are some other notable qualitative observations from the villages that are highlighted in this section. It is noted that electrification in the four villages did not translate directly into a substantial increase in income or working time, as suggested in some literature [23,[69][70][71]. This is mainly because of two reasons: Firstly, the villagers, who were mostly farmers and fishermen, could not directly increase their working time or productivity through the use of electricity.…”

“…Electrification is generally thought to bring about increases in household income due to extended productive activities [23,[69][70][71]. In some cases, however, there has been evidence that only when productive activities take place within the household, electricity impacts the most [72].…”

Window of opportunity for sustainable energy

“…The profitability of these business activities grows by 100-150% [13,14]. Manufacturing companies in developed countries report that the substation of electrical power for heat and other energy carriers in various production processes yields the following results in the long run:…”

Community-based centralized solar mini-grid management for rural electrification: Evidence from remote villages

“…This has in fact had an impact on opening jobs, new income, and household expenses [13]. Conceptually it was also found that the use of RE had an impact on the socio-economic conditions of beneficiary communities such as increased income, business productivity, new jobs, and community capacity [14][15][16]. However, after three years of operation, solar mini-grid management found various problems such as power theft, payment delays, damaged components and even reduced electrical power performance.…”

“…Several previous studies have looked at the feasibility, potentials analysis, and technical aspects of Centralized PV mini-grid [3,17], impact of solar PV mini-grid [15,[18][19][20], and renewable energy policy [21][22][23][24]. How to manage community-based centralized PLTS and what factors influence it is still rarely explored, especially in remote villages in Indonesia.…”