Universal Electrification in Rural Areas

EghtesadOnline: While rural electrification rate in the world is 76% (based on United Nations data), the figure is almost 100% in Iran, Energy Minister Reza Ardakanian said.

News ID: ۷۴۸۵۰۷

22 September 2019

"An estimated 21 million people in rural areas, or nearly 26% of the total population, are now connected to the national grid," the minister was quoted as saying by ISNA.

Close to 57,000 rural districts are connected to the national grid.

The minister is of the opinion that power projects could have gained further momentum if consumers paid real prices for the electricity they use. Power generation cost, including production and transmission, is two cents per kilowatt-hour, but consumers are charged 0.7 cents per kWh, Financial Tribune reported.

As per law, electricity subscribers pay 8% of the cost of the power consumption as tax to Iran Power Generation, Distribution and Transmission Company (Tavanir). This money is reportedly spent on expanding rural power infrastructure. This amount will rise by 2% by next March, which should hopefully help augment the power sector, Ardakanian said.

Referring to statistics, he said an estimated 4.5 million households in remote regions were linked to the network over the past 12 months and at least 400 more villages will be added by March.

"The number of rural areas with access to power has shot up 13 fold (1,200%) in the past four decades (from 4,360 in 1979 to 57,300 now)," he added, noting that length of the national power distribution network now exceeds 800,000 kilometers, of which 250,000 km is in the underdeveloped regions.

Experts say electricity alone cannot create all the conditions for economic prosperity, but remains crucial for economic growth as a pre-requisite for manufactures and the key agro sector.

Despite advances in global electrification rates, 1.1 billion people are still deprived of electricity. Approximately 87% of the people without electricity across the world live in rural areas characterized by remoteness and sparse population density, where the extension of national grids is often technically difficult, costly and economically unfeasible.

Major Impediment

According to the International Energy Agency (IEA), lack of access to energy, and more precisely to electricity, is one of the major impediments to economic development.

In addition to improving productivity by giving access to more efficient means of production, access to an electrical grid and better electricity services could allow them to work more hours by increasing their access to markets.

Looking at official data in other countries like India shows that only 1,417 of India’s 18,452 villages, or 7.3% of the total, have 100% household connectivity, and about 31 million homes are still in the dark.