Energy and Rural Development

Access to energy services is fundamental to human activities, development and economic growth. Developing countries have 80 per cent of the world's population but consume only 30 per cent of global commercial energy; more than two billion people rely on traditional biomass fuel for cooking and cannot access affordable modern energy services. Without access to better energy services, opportunities for economic development and improved living standards are severely constrained. The Millennium Development Goals will not be achieved without complimentary focus on energy aspects.

Rural electrification programmes have demonstrated that affordability is a key barrier to more widespread adoption of RETs, particularly in poor rural off-grid areas. The issue of affordability has left many efforts to date financially unsustainable. It is therefore crucial that RETs are promoted with a strong focus on expanding business opportunities for rural enterprises thus creating additional income.

Central to the debate surrounding energy and rural development, including both conventional options and RETs, are two realities: One is that the majority of rural people are poor. The other is that they are caught in a 'vicious circle' of energy poverty whereby they need modern energy services - from RETs or conventional sources - to escape poverty, but their lack of purchasing power prevents them from acquiring such services. So, as long as poverty remains the distinguishing feature of rural underdevelopment, no breakthroughs in RETs markets are conceivable.