Reorienting and recreating firms in the electrification industry to achieve universal electricity access

The Sustainable Development Goal Target 7.1 sets out the global goal for universal access to affordable, reliable, sustainable, and modern energy services by 2030. While the global population lacking access to electricity dropped from 1.1 billion in 2010 to 675 million in 2021, the annual rate of increase needs to double to achieve universal access to electricity by 2030. If no additional measures are taken, about 660 million people will still be unserved in 2030 with more than 80% of them in Sub-Saharan Africa. Despite steady progress in the access rate over the past decade, the number of people without access in in Sub-Saharan Africa remained stagnant because of population growth, leaving 567 million without access in 2021. The gains made in increasing electricity access have resulted from a multi-pronged approach to electrification that combines off-grid and on-grid approaches implemented by public and private actors. To increase the effectiveness of such an approach, it is necessary to understand how different electrification approaches and actors are interconnected and complementary and to identify where and how external pressure can be exerted to stimulate and facilitate the reorientation and recreation required by firms in the ‘electrification industry’ to sustainably increase electrification rates. The dissertation comprises three parts: Part I – Introduction. Chapter 1 provides a synthesis of the dissertation. It gives an overview of the electricity access challenge in Sub-Saharan Africa that the dissertation attempts to address, presents the frameworks and methods used in the dissertation, and an outline of the dissertation. Part II – Systems Analysis of Electrification in East Africa Chapter 2 focuses of the capabilities of off-grid electrification approaches based on a study of business models implemented by 13 solar and mini-grid businesses in East Africa. Experiences from implementation of the different business models are analysed and generic descriptions provided. The business models are compared to illustrate their suitability and effectiveness for delivering different levels of electricity access. The chapter also discusses the limitations of conventional rural electrification strategies and the opportunity to incorporate some of the models analysed through public-private partnerships. Chapter 3 extends the systems analysis to all firms delivering electricity access, irrespective of whether they deploy on-grid or off-grid electrification approaches or whether they are public or private. An analysis based on information sourced from grey and academic literature is used to determine what shapes and influence these firms and to identify how external pressure can be exerted to reorient and recreate these firms to further contribute to the achievement of the universal electricity access goal. The analysis shows that to reorient and recreate firms in the electrification industry to meet East Africa’s electricity access objectives requires interventions that: (1) increase the flow of private sector resources and expertise to electrification, and (2) reduce the burden that on-grid (and mini grid) electrification activities are creating on national electrification utilities. These interventions are based on the acknowledgment of electrification funding constraints, and that an increase in rural household grid connections results in increasing operation and maintenance activities and costs without a concomitant increase in revenue. Part III – Governing and Guiding Electrification Transition Describes practical approaches to direct, facilitate, and accelerate the transition to universal electricity access. Chapter 4 describes a practical activity implemented in Kenya to develop a long-term transition vision for electricity access and to identify and map out different transition paths to achieving the vision. It describes how to structure and institutionalize the participation of non-state actors (i.e., private sector, civil society, and development organizations) in Kenya’s national energy planning process, a standardized approach for non-state actors to inputs for Kenya’s national energy plan, and the inputs developed through this approach for the electricity access component of the energy plan. Chapter 5 describes a framework for designing solar home system- based electrification programs that can contribute to national electricity access objectives. The framework is based on interviews with twelve off-grid solar companies to identify the key issues to consider at the design stage, a study of seven solar home system projects aimed at leveraging private sector expertise and resources through a results-based financing framework, and adapting, and combining approaches from the projects studied. In conclusion an integrated systems analysis of the electrification industry in East Africa was undertaken to provide a structured way of laying out the key aspects associated with electrification and to identify where and how to achieve more effective complementarity between on and off-grid approaches, and public and private firms. This analysis was then used to develop a transition vision for electricity access in Kenya, and identify the interventions required to realize the electricity access vision. To contribute to the longer-term goal of transitioning solar home system- based electrification from a niche approach to a mainstream approach, a framework for designing national solar home system- based electrification programs was designed to operationalize the delivery of household electricity access through solar home systems.