Public Services, Equity, and Innovation: Some Lessons from the French Rural Electrification Regime

Abstract

Rural electrification in France has entered a new growth phase due to: (i) the developmwt of new end-uses of electricity; (ii) the appearance of new requirements pertaining to the environment and supply quality; and (iii) the prospect of new, tighter European standards. This leads to some questions regarding the adequacy of an institutional framework which has survived for several decades without any major modification. We propose a change in the incentive system based on the following steps: (i) spelling out some of these questions, using a description of the changes that have marked rural electr{ficatian in France; (ii) attempting to see them in a new light through an analysis of the development cost of rural grids and the opportunities to realize the cost reductions potentially offered by non-conventional alternatives based on Demand-Side Management; and finally (iii) placing these questions in the general context of an equitable treatment of users and the ensuing balancing-out effort concerning spatial costs in rural areas, considerations zohich have driven the rural electrification system in France from its in ceptian.