Page 19 - Oasys South Asia Research Project - Towards Scaling Up of Electricity Access
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Lessons from the Global Review of Electrification Experience 13
in many spheres of local development is to involve the community closest to the
targeted beneficiaries that can leverage local skills and resources and overcome
local resistances.
2.4 Regulatory Weaknesses
Researchers observe that there is a need for regulation or some form of regulatory
control of off-grid electrification (Sarangi et al. 2012). This emerges from several recent
developments observed in the sector. One of the interesting developments is related
to gradual increase in the participation of private players in the field, albeit in varying
forms, i.e., pure privatization, and Public-Private Partnership (PPP) forms. This has
been spurred by accommodative provisions introduced through changes in legal and
legislative spheres governing the sector. However, private participation depends on
developing proper regulatory arrangements for governing off-grid electrification or
decentralized electrification. However, regulation of off-grid electrification has not
received adequate attention in many countries.
Bhattacharyya (2013) analysed the regulatory issues of off-grid electrification and
argues that in the case of individual solutions which are delivered through sale or renting
of products, no distribution or transmission network is involved. In fact, electricity
supply as a business is not carried out in these cases. Accordingly, this solution does not
violate or interfere with the electricity acts or regulations and the problem of natural
monopoly does not arise. Hence, the need for economic regulation does not arise here,
although there is need to ensure compliance with technical, environmental and health
and safety standards. On the other hand, a local mini-/micro-grid based service uses a
distribution network and a set of decentralized generators. Here economic regulation
becomes pertinent for two reasons: 1) to ensure that the activity complies with the law
of the land and 2) to protect the interests of investors and consumers.
Three alternative forms of regulation can be identified (Bhattacharyya 2013):
55 A generic waiver or exemption from the standard provisions applicable to the
electricity supplier may constitute a simple solution. This can take different forms.
For example, a blanket exemption for rural areas (as followed in India under
the Electricity Act 2003) is a possibility. An exemption up to a given threshold
(as in Mali, Senegal or Tanzania) or exemptions for specific organizations (e.g.,
cooperatives in Ethiopia) are other possibilities.
55 A simplified, standardized regulatory arrangement can offer a light-touch, practical
approach. Such a regulation should specify the role and duties of the provider, set
the information filing requirements and ensure consumer protection mechanisms.
This reduces the compliance cost and imposes lesser burden on the regulators.
55 A full-fledged regulatory arrangement constitutes the most formal regulatory
in many spheres of local development is to involve the community closest to the
targeted beneficiaries that can leverage local skills and resources and overcome
local resistances.
2.4 Regulatory Weaknesses
Researchers observe that there is a need for regulation or some form of regulatory
control of off-grid electrification (Sarangi et al. 2012). This emerges from several recent
developments observed in the sector. One of the interesting developments is related
to gradual increase in the participation of private players in the field, albeit in varying
forms, i.e., pure privatization, and Public-Private Partnership (PPP) forms. This has
been spurred by accommodative provisions introduced through changes in legal and
legislative spheres governing the sector. However, private participation depends on
developing proper regulatory arrangements for governing off-grid electrification or
decentralized electrification. However, regulation of off-grid electrification has not
received adequate attention in many countries.
Bhattacharyya (2013) analysed the regulatory issues of off-grid electrification and
argues that in the case of individual solutions which are delivered through sale or renting
of products, no distribution or transmission network is involved. In fact, electricity
supply as a business is not carried out in these cases. Accordingly, this solution does not
violate or interfere with the electricity acts or regulations and the problem of natural
monopoly does not arise. Hence, the need for economic regulation does not arise here,
although there is need to ensure compliance with technical, environmental and health
and safety standards. On the other hand, a local mini-/micro-grid based service uses a
distribution network and a set of decentralized generators. Here economic regulation
becomes pertinent for two reasons: 1) to ensure that the activity complies with the law
of the land and 2) to protect the interests of investors and consumers.
Three alternative forms of regulation can be identified (Bhattacharyya 2013):
55 A generic waiver or exemption from the standard provisions applicable to the
electricity supplier may constitute a simple solution. This can take different forms.
For example, a blanket exemption for rural areas (as followed in India under
the Electricity Act 2003) is a possibility. An exemption up to a given threshold
(as in Mali, Senegal or Tanzania) or exemptions for specific organizations (e.g.,
cooperatives in Ethiopia) are other possibilities.
55 A simplified, standardized regulatory arrangement can offer a light-touch, practical
approach. Such a regulation should specify the role and duties of the provider, set
the information filing requirements and ensure consumer protection mechanisms.
This reduces the compliance cost and imposes lesser burden on the regulators.
55 A full-fledged regulatory arrangement constitutes the most formal regulatory
