Socio-economic impacts and challenges associated with the electrification of a remote area in rural Tanzania through a mini-grid system

Abstract

Electricity is an indispensable building block for sustainable development. As national and international electrification measures in rural areas of Tanzania are progressing slowly, a solar-powered mini-grid system with second-life battery storage was commissioned on an island in Lake Victoria in 2019 to support local development. This article evaluates the socio-economic impacts associated with electrification through this system. On average, 42.31 kWh of electricity could be provided per day. The daily demand of the main infrastructure (hospital and school) was 18.75 kWh on average. The remaining capacity thus offers enough potential to supply private households and possible economic activities. In order to evaluate the impact of electrification, a qualitative survey was conducted on site 12 months after commissioning, with 7% of the people living there being interviewed. Language barriers as well as intercultural hurdles made the survey difficult and required an adaptation of the on-site implementation. The focus of the survey was on the areas of health, education and economics. The study revealed that the availability of electricity has enormous potential to improve people's living conditions. Initial successes could be seen, especially in the areas of health care and the economic sector. So far, electrification has had no influence on the area of education. While the connections for the main infrastructure have been institutionally supported, the system-related electricity price of €1.30/kWh has proven to be a major obstacle for private households. This is far too high for widespread use compared to incomes. The article thus focuses on the observation that full socio-economic development through electrification can only succeed if local people can afford it. Possibilities to solve this problem are analysed. Since the energy is generated on the basis of renewable resources, the analysis focuses on the use of mechanisms of the emissions trading system (ETS). The aim is to generate revenue through the sale of certified emission reductions (CERs) for the saved CO₂ emissions and thus reduce the electricity price. A reference scenario of conventional energy production forms the basis for discussion of the effectiveness of the Clean Development Mechanism (CDM) and the Carbon Initiative for Development (Ci-Dev). In addition, the approach of a monthly free quota of electricity, the free basic electricity initiative (FBE), is included in the evaluation.

Keywords

Photovoltaic (PV) mini-grid / Sustainable energy / Circular economy / Socio-economic development / Electrification in sub-Saharan Africa (SSA) / PDCA cycle / Environmental impact

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Funding

Fraunhofer Institute for Telecommunications (HHI) (1050)