By Guohui Yuan

Rural
Electrification
Goes Local
Recent innovations in renewable generation,
energy efficiency, and grid modernization.

he definition of rural areas has rural areas were without

T
evolved over time because of the urban- electricity. An executive
ization movement. Today, rural areas are order was signed by
typically defined as all territories outside President ­Franklin Roos-
urban or suburban areas, where farming evelt in 1935 establish-
is still the main economic activity. The U.S Census ing the Rural Electrifica-
Bureau defines a rural area as any area outside of an tion Administration, and
urbanized area whose population is greater than 50,000 by 1975, more than 99%
and whose core population density is greater than 1,000 of all farms had electric-
persons per square mile (or 386 persons per square kilo- ity. The National Acade-
meter). There are many other definitions by different my of Engineering ranks
countries and even by different government agencies electrification as one of
within the same country. Regardless, the common attri- the greatest engineering
butes of rural areas are the small population clusters achievements in the
and low population density. These two characteristics 20th century.
dictate that there are tremendous challenges to build- Similarly, in other developed countries, the rural elec-
ing infrastructure in the geographically disperse rural trification rate is 99% or greater. In the developing world,
areas, which c­ onstrains economic activities and house- however, rural electrification has lagged by several
hold incomes. decades but has grown rapidly in recent years, particularly
in China (>99%) and India (>90%). Still, as of 2009, over a
Historical Background billion people, or 20% of the world’s population, do not
Rural electrification has come a long way since the early have access to electricity. The majority live in rural areas.
days of electric power systems. In the United States, by the
end of 1920s, electricity was generally accessible to the Rural Electrification Mission
average citizens in cities like New York, but most of the People living in rural areas use electricity beyond the basic
needs of lighting and watching TV. To improve their stan-
dard of living at home, they need electricity for heating and
cooling and for home appliances for daily chores. To
Digital Object Identifier 10.1109/MELE.2014.2380193
Date of publication: 27 February 2015 achieve higher productivity at work, they need electricity

16 I EEE E l e c t r i f i c a t i on M a gaz ine / March 2015 2325-5987/15©2015IEEE


image licensed by ingram publishing
for farming, pumping, and food processing. For trade and
commerce, they need communication, transportation, and
finance. They also need 21st-century services such as dis-
tance learning, telemedicine, and broadband Internet. All
require ­electricity.
Technology advancements have been able to close the
gap between urban and rural infrastructures, thereby nar-
rowing the difference between the standards of living. The
most recent examples are the wireless communication and
Internet technologies, which enable rural areas to skip the
traditional wired infrastructures and leap into the digital
wireless era. There is no doubt that the emerging technolo-
gies in renewable generation, the smart grid, electric vehi-
cles, and energy efficiency will revolutionize rural electrifi-
cation once again.
Current Solutions
Broadly speaking, there are two rural electrification mod-
els today. In developed countries, centralized power sys-
tems have been built in rural areas over the years with
long transmission and distribution lines. The infrastruc-
ture is aging. The costly system upkeep, lack of flexibility,
and reliance on largely fossil fuel-based power generation
are some of the reasons that the existing systems are not
sustainable. Renewable generation such as wind and solar
photovoltaics (PVs) is emerging but still constitutes a tiny
fraction of the generation mix.
In the developing world, off-grid diesel generation and
primitive distribution lines have been the most popular
alternative for rural electrification. (Some island areas in
developed countries, such as Hawaii and Puerto Rico, also
rely on diesel generators but have a more mature distribu-
tion grid.) In the short term, diesel generation provides a
decent solution to meet the day-to-day electricity needs of
people living in rural and remote areas. There are some
advantages with diesel: it is modular, quick to set up, and
easy to operate. But for the long term, diesel generation is
not sustainable because it is expensive, less efficient, less
reliable, noisy, and polluting. Diesel generation is highly
­sensitive to fluctuations in fuel supply and prices. Transpor-
tation safety is also a big concern.
Challenges Facing Current Systems
The biggest challenge for rural electrification is the high cost
associated with building and maintaining generation, trans-
mission, and distribution lines. In the traditional centralized
power system, large generation plants are usually built near
urban population centers so as to reduce the cost of building
transmission lines. They are not optimally designed in terms
of size and location for g­ eographically dispersed rural areas.
In many cases, the transmission lines simply pass through
rural areas without providing electricity to the communities
down below. Studies have shown that it typically costs mil-
lions of dollars per mile to build transmission lines and hun-
dreds of thousands of dollars for distribution lines. The fossil
fuel-based power plants tend to be built as large as possible
to recoup the huge capital cost and make a profit for the
investors. Compared with urban and suburban areas, rural
areas have the fewest customers per mile and energy con-
sumption and energy revenue per mile, providing few incen-
tives for business development in rural electrification.
Because of these unfavorable economic factors, government
subsidies (and/or mandates) have been the primary resourc-
es for building rural electric infrastructure. When the subsi-
dies are not available, rural people are left without electricity.
In most countries, electricity markets and policy mecha-
nisms also play a critical role in influencing the end con-
sumers’ behavior and, in turn, the investment decisions by
the service providers on long-term infrastructures. Market
mechanisms work best when generation and demand
respond elastically to the pricing curve. Today, neither gen-
eration nor loads are dynamic enough to respond to pricing
IEEE Elec trific ation Magazine / m a rch 201 5 17
 signals. Another major challenge is the cost allocation of
infrastructure investment among key market participants.
For example, to integrate large amounts of r­enewable gen-
eration into the grid, transmission and distribution
upgrades are needed in most cases. How to fund these
upgrades has been debated for years, and there does not
seem to be a clear solution.
In addition to the economic challenges, there are many
technical and operational challenges as well. By the laws
of physics, the fundamental challenge of power systems is
the balance of supply and demand while complying with
system performance and reliability standards. Electricity
cannot yet be stored as easily and affordably as gasoline,
but we are getting there. Therefore, generation and con-
sumption have to be balanced in real time. Most of the
world uses ac synchronous systems, which require all
generators to operate at the same
voltage, frequency, and phase angle
to within an allowable margin.
Compared with a small system in
which generation and load are colo-
cated and the number of nodes in the
network is modest, it is much harder
and more complex to balance a large
interconnected power system in
which hundreds of large generators
are connected through thousands of
miles of transmission lines to serve
millions of people. The locations, net-
work topologies, and dynamics and
variability of generation and load are
all contributing factors that deter-
mine how supply and demand are
balanced within a specific service
area as well as in the entire power
system. In the United States, regional
system operators and independent
system operators have the most challenging job of balanc-
ing tens to hundreds of gigawatts of electric power—second
by second, minute by minute, and hour by hour—in a geo-
graphic area that usually covers multiple states. Some of
their major tasks include generator control and dispatch,
frequency and voltage regulation, load forecasting and unit
commitment, system protection and recovery, and meter-
ing and account settlement.
The centralized ac power system model is neither flexi-
ble nor resilient. The generation plants are not flexible
because of their sheer size and the time it takes to ramp up
and down. The smaller gas-fired peaker units have faster
ramp rates, but they do not run all the time because of
higher operation costs. (The current natural gas production
boom and low price have made gas-fired power plants
more competitive. However, it remains to be seen whether
the low gas price is sustainable.) The load is not flexible
either. Most of the electric loads today are passive, meaning
that they are unaware of the generation supply situation
18 I E E E E l e c t ri f i c a t i on M a gaz ine / March 2015
and the electricity pricing. For example, on a hot summer
day, the air-conditioning systems will operate at full duty
cycle while the power system is stressed to its limit. The
dynamic pricing response is only limited to those loads that
are retrofitted with demand response control systems.
In the distribution system, reverse power flow is a
major challenge as the penetration of distributed renew-
able generation such as rooftop PV increases. The current
ac power system has been designed and optimized for
power flow in one direction: from central generation to
end consumers. It is anticipated that at higher penetra-
tion, distributed wind, solar, and other small generation
can exceed power consumption needs at certain inter-
connection points, and, therefore, reverse power flows
can occur in the direction from consumers back to the
distribution grid and possibly back into the bulk power
system. Grid planners and operators
need to make sure that the protec-
tion equipment recognizes bidirec-
The costly system tional power flows and that equip-
upkeep, lack of ment ratings and settings properly
account for the total fault currents
flexibility, and coming from all sources. Another
key challenge in the distribution grid
reliance on largely is the management of variability
fossil fuel-based from wind and solar generation so
that it does not cause voltage varia-
power generation tions to exceed the American
National Standards Institute limits.
are some of the Without proper management, the
reasons that the variability can cause excessive oper-
ation and premature failure of
existing systems voltage-­regulation equipment such
as load tap changers, voltage regula-
are not sustainable. tors, and capacitor banks. A third
challenge is the complexity involved
in the coordinated system operation
through the integration of sensors, power-flow control-
lers, communications, supervisory control and data
­acquisition (SCADA), and operation software such as Dis-
tribution Management System (DMS). The integration of
information technology (IT) and operation technology
(OT) are becoming more and more important for grid
operation, but the existing solutions tend to be quite
complex and expensive.
These technical and operational challenges are partic-
ularly difficult for the rural electric system because of its
long distribution feeders and distance from the transmis-
sion lines. When renewable generation plants are built in
rural areas, they tend to be large due to the availability of
land. As a result, reverse power flow, voltage regulation,
and wear and tear of equipment are all real problems for
the relatively weak rural electric grid. Reconfiguring and
upgrading the system hardware and software adds signif-
icant cost, and the integration of IT and OT is technically
nontrivial.
 Most of these challenges mentioned apply to the rural
off-grid power systems as well. There, the power quality
and reliability issues are even more pronounced because
of the lack of sophistication in system planning and oper-
ation. While most of the discussions in this and the fol-
lowing sections are based on the U.S. electric power
­system, the general principles also apply to other coun-
tries and other types of electric power systems.
Sustainable Rural Electric
Infrastructures—A New Era
The challenges facing today’s centralized electric power
system are the results of the over 100 years of legacy. They
also reflect the lack of viable alternative solutions up until
now. Today, the entire energy industry, of which rural elec-
trification is an integral part, is undergoing a transforma-
tion that only happens once in a lifetime. Numerous
­breakthroughs are happening in r­enewable generation, the
smart grid, energy storage, electric vehicles, and energy
­efficiency that will fundamentally change the way we
­generate, store, deliver, and consume
electricity. The convergence of energy
and information ­technologies (or OT
and IT) is also a signature of this The current natural
transformation. There is already a
critical mass to integrate these tech-
gas production boom
nologies into a new, affordable, and and low price have
sustainable energy system—rural
electrification included. made gas-fired
I propose a model rural electric
system, where the ingredients of this
power plants more
model system include mostly local competitive.
renewable generation (solar, wind,
and biomass), a local power-­delivery
network (no transmission or substa-
tion), an optimal amount of energy storage, energy-efficient
and flexible loads, and operation management to self-bal-
ance the local generation and demand. The size of this
model system can range from a few kilowatts to several
megawatts, powering anywhere from a single home to an
entire rural community.
This model elegantly addresses the many challenges
discussed earlier. Using local renewable resources brings
generation closer to the load and eliminates the need for
building long transmission and distribution lines. Self-­
balancing at a smaller footprint makes system planning
and operation simpler and more resilient. By dynamically
managing the flexible load, it is possible to optimize the
supply and demand curve at the same time. It is worth
pointing out that market mechanisms and business mod-
els need a paradigm change as well to go local and
­distributed. Deregulated retail energy services, nontradi-
tional utilities, prosumers (i.e., producer and consumer),
transactive energy, cooperatives, peer-to-peer energy shar-
ing, and other ideas have shown promises. There is no
one-size-fits-all solution. This is a fertile ground for inno-
vation as the energy transformation unfolds. The follow-
ing sections will discuss the proposed model rural electric
system in more detail.
Local Renewable Generation
The advancement in renewable generation technologies and
the rapid decline in costs have become game changers for
the electric industry, and rural electrification is no exception.
The vast area covered by rural communities used to be a dis-
advantage, but it now becomes a huge advantage because
renewable generation, which is the distributed energy
resource, needs a lot of land space. In ideal cases, the rural
areas will be net electricity exporters because their wind,
water, and solar resources exceed what can be consumed
locally. David Mackay well articulated this point by plotting
the per capita energy consumption (i.e., energy consumption
intensity) for most of the countries in the world alongside
the available renewable energy resources per square meter.
Note that this is the total energy consumed for transporta-
tion, heating, and electricity. (The average energy consump-
tion in the United States is the equiva-
lent of 250 kWh/day per person.) It can
be seen from Figure 1 that in most of
the world (including the United
States), the average energy intensity is
below the 0.5-W/m2 line. Comparing
this to the wind power line of 2.5 W/m2
and the PV solar line of 10 W/m2, it is
reasonable to conclude that in most
places, local wind, solar, and other
renewable resources are sufficient to
meet the demand with acceptable
land use ratio. Other studies have
reached similar conclusions.
We can extend this analysis to
rural areas using the same methodology and U.S. census
and Energy Information Administration data. Figure 2
shows a plot of some representative samples of state- and
city-level electricity consumption versus the population
density. On average, the per capita electricity consumption
is about one-third of the total energy consumption. Without
any surprise, we found that there is a wide ­distribution of
population density and per capital electricity consumption
among the states and major cities. We carefully researched
and plotted the “United States Rural” data point, which is
­calculated using data from the National Rural Electric Coor-
perative Association (NRECA) fact sheets, and the “Tri-State”
data point, which is calculated from the annual report of
the Tri-State cooperative utility in the western region. These
indicate that the average rural energy consumption per
person is much lower than the U.S. average. Regardless of
urban or rural, the per capita electricity consumption
across the United States is quite high (close to 100 kWh/
day/person).
Almost all of the states and cities plotted (except for the
densely populated areas of New Jersey, New York City, and
IEEE Elec trific ation Magazine / ma r c h 201 5 19
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Population Density (People Per km2)

Figure 1. The power consumption per person versus the population density in 2005. The point size is proportional to the land area (except for
areas under 38,000 km2, which are shown by a fixed smallest point size to ensure visibility). Both axes are logarithms. (Figure courtesy of David
J.C. MacKay, www.withouthotair.com.)

Washington, D.C.) are well below the 10-W/m2 solar power distribution, and consumer. For future rural electrification,
resource line, which means that local PV generation can meet this can be replaced by a local power delivery n ­ etwork (no
a significant portion of the total electricity demand. (Note that transmission or substation) that integrates an optimal
a simple calculation using the National ­Renewable Energy amount of energy storage, energy-efficient and flexible loads,
Laboratory’s PV watts shows that PV power output ranges and uses operation management tools to self-­balance the
from 10 to 30 W/m2, depending on geographic location, cli- local generation and demand. Communications, SCADA, and
mate zone, module technology, and ­system configuration. For information technologies will be ­critical parts of this new
the analysis in this article, we use 10 W/m2 to simply illustrate system. The size of this model system can range from a few
its order of magnitude.) In rural areas, the energy consump- kilowatts to several ­megawatts in size, representing an
tion density is several times lower than the national average ­individual home up to a small community of several thou-
and well below 0.1 W/m2; therefore, the local supply-and- sands. This model system, essentially a microgrid, offers an
demand picture looks much more favorable. excellent solution for the future rural electrification because
Countries and regions can be grouped into four catego- it is 1) distributed and local, 2) clean and sustainable, 3) mod-
ries with distinct energy consumption profiles: rural ular and scalable, 4) reliable and resilient, and 5) cost-effec-
developed, urban developed, rural developing, and urban tive. See Figure 4 for the rural electric model system and vari-
developing (Figure 3). Clearly, both rural-developed and ous microgrid configurations.
rural-developing regions can rely on local renewable If the model system were built from scratch, it would
resources to meet the energy demand. The urban areas have been built from the bottom up, and from the edge to
will need more energy-dense local generation or will need the center, without centralized planning. It can start from a
to import from other regions. single prosumer microgrid, in which rooftop PV, for exam-
ple, will produce all of the energy needed for the household
Local Grid Infrastructure consumption. An energy storage system will be needed for
The traditional centralized ac power system is built and opti- nighttime use and for smoothing out the PV variability. A
mized for one-way power flow: generation, transmission, home energy management system will ­monitor and

20 I E E E E l e c t ri f i c a t i on M a gaz ine / March 2015

 Per Capita Electricity Consumption–Generation Resources
1,000
0.001 W/m2 0.1 W/m2 PV–10 W/m2
Wyoming 0.01 W/m2 1 W/m2 United States and States
Electricity Consumption (kWh/d/p)

Iowa
Texas
100
Colorado Hawaii New York
Washington, D.C.
United States New Jersey
Tri-State Los Angeles
California
New York City
United States
Rural
10

1
1 10 100 1,000 10,000
Population Density (People/km2)

Figure 2. The U.S. state- and city-level per capita electricity consumption in relation to population density and available renewable energy
resources per square kilometer.

­ ontrol both the generation and load for system balancing.

c
This is the zero net energy (ZNE) home model and can be Per Capita Energy
achieved with existing technologies. If the costs continue to Consumption Versus Generation Resources
1,000
come down as in recent years, the single prosumer
Energy Consumption (kWh/d/p)

microgrid will be very popular in rural areas. Urban,

Rural, Developed 2
Next is the neighborhood microgrid, in which a few Developed 1
homes can pool together the generation resources to meet 100
their demands. A modest investment in electric wiring is Urban,
needed to connect the homes together. The neighborhood Developing 4
Rural,
energy management system will be a little more sophisticat- Developing 3
10
ed to balance the generation and load for the collection of
homes. The generators and storage might not be colocated
in the homes but will be close by. The neighborhood
microgrid can have both ZNE and non-ZNE homes. But it is 1
1 10 100 1,000
a ZNE neighborhood and does not import or export energy
Population Density (People/km2)
across the neighborhood boundary.
Next is the community microgrid, in which tens to hun- 0.001 W/m2 1 W/m2
dreds of homes and buildings are connected together. L ­ arger 0.01 W/m2 PV–10 W/m2
solar systems might be built and shared in the c ­ ommunity. 0.1 W/m2
More electric wirings are built to connect the homes togeth-
er. More sophistication is needed in the energy management Figure 3. The grouping of countries and regions into four categories
with distinct energy consumption profiles.
system. The community microgrid is a ZNE community that
includes both ZNE and non-ZNE homes and both ZNE and
non-ZNE neighborhoods. It does not import or export energy
across the community boundary. to the region and connected, then the substation microgrid
Up to this point, the microgrid systems are mostly peer to can operate in both grid-­connected and island mode.
peer, without the need for a substation and transmission. The This is not meant to be an exhaustive list of microgrid con-
substation microgrid looks more like a traditional distribution figurations but just some examples to highlight the key mes-
system operating in island mode. If transmission is expanded sage that microgrid-based systems can be built modularly. At

IEEE Elec trific ation Magazine / ma r c h 201 5 21

 [Figure 5(a)]. The large, interconnected
Transmission system needs to be designed and
Distribution operated to meet the diverse and
sometimes conflicting needs of each
Full Substation Microgrid local area, and in many cases, the sys-
tem has to compromise to a nonopti-
mal design. With the microgrid, each
Community Microgrid local area is its own BA and is indepen-
DG
DG ES
dent of the others. Therefore, the sys-
tem design can be optimized to the
DG ES particular energy consumption profile
Neighborhood
Neighborhood for each local area [Figure 5(b)].
Microgrid
Microgrid Single
Prosumer
Microgrid
Local Business Models
The existing electricity markets
DG
DG
and utility business models have
ES become barriers to the deployment of
new t­echnologies, whether it is wind
and solar renewable generation, ener-
gy efficiency, or the smart grid. They
also hinder the investment in the tra-
Figure 4. The rural electric model system and various microgrid configurations. ES: energy storage. ditional way because of the huge up-
front costs, market complexity (regu-
lated versus deregulated, federal ver-
each level, the individual network nodes can operate as sus state jurisdiction), and cost allocation issues. As a result,
automatons. For the system components to work seamlessly investment decisions on electric infrastructure tend to be
together, the intelligence has to be distributed and the integra- very conservative and take a long time, leaving the existing
tion interfaces have to be well defined. grid quickly aging, less reliable, and less resilient.
The microgrids can also be viewed from the balance area Technology advancements have leveled the playing field
(BA) perspective. In today’s centralized ac system, a large bal- where smaller, local, and nonutility entities can safely and
ancing area (such as the California Independent System efficiently generate and deliver electricity and become elec-
Operator service territory) usually consists of smaller local tricity service providers, breaking open the natural monopoly
regions having distinct energy consumption profiles of the utility industry. The ubiquitous communication and

Per Capita Energy Per Capita Energy

Consumption-Generation Resources Consumption-Generation Resources
1,000 1,000
Energy Consumption (kWh/d/p)

Energy Consumption (kWh/d/p)

2 BA2
100 100
1 BA1
BA0
4 BA4
10 10
3 BA3

1 1
1 10 100 1,000 1 10 100 1,000
Population Density (People/km2) Population Density (People/km2)
(a) (b)

0.001 W/m2 0.01 W/m2 0.1 W/m2 1 W/m2 PV–10W/m2

Figure 5. (a) A large BA typically consists of smaller regions with varying energy density profiles. (b) A large BA can be broken down into smaller
BAs for better operation.

22 I E E E E l e c t ri f i c a t i on M a gaz ine / March 2015

information technologies are also key enablers for these
emerging energy service providers and will revolutionize the
energy service industry like they did for other industries,
including commercial retail, travel, and health care.
The traditional utilities need to be incentivized to invest
in new technologies through a decoupling mechanism,
meaning that the utilities’ revenue and profit are not tied to
the number of kilowatt hours sold but cover a whole range of
services. Utilities should be allowed to engage in deregulated
electric retail services. In the United States, the rural utilities
have long adopted the cooperative model, which has been
very successful in keeping the electricity costs down.
Both traditional and nontraditional electricity service
providers can adopt the concept of transactive energy that,
according to the GridWise Architecture Council, “refers to
techniques for managing the generation, consumption, or
flow of electric power within an electric power system
through the use of economic or market-based constructs
while considering grid reliability constraints. The term
‘transactive’ comes from considering that decisions are
made based on a value. These decisions may be analogous
to or literally economic transactions.”
Case Study 1: Cost of Distributed
Generation Integration in California
Southern California Edison (SCE) is an investor-owned pub-
lic utility primarily engaged in the business of supplying
and delivering electricity to an approx-
imately 50,000-mi2 area of southern
California. The SCE serves a popula-
tion of nearly 14 million people The advancement
through approximately 5 million cus-
tomer accounts. SCE’s service area
in renewable
covers a diverse geography of urban, generation
suburban, and rural areas including
desert and mountain regions. Approxi- technologies and
mately 75% of SCE’s customers reside
in urban and suburban communities
the rapid decline in
covering 15–20% of the service territo- costs have become
ry, while the remaining 25% of cus-
tomers live in rural areas spread game changers for
across 80–85% of the service territory.
Out of the total 4,500 feeder circuits,
the electric industry.
3,626 are urban and 874 are rural. Fig-
ure 6 shows the geographic locations
of the urban and rural areas in the SCE service territory.
Two separate studies were conducted by SCE and the
California Energy Commission to estimate the cost of inte-
grating 4,800 MW of distributed generation, which is SCE’s
share of the 12,000-MW California statewide local energy
resource/distributed generation (DG) capacity target and is
primarily achieved through distributed PV. SCE has a peak
load of about 22.5 GW; therefore, the 4,800 MW of DG rep-
resents approximately 20% of DG penetration by capacity.
The studies conclude that the costs of the transmission
and distribution system upgrade for DG integration
Rural
Urban
Figure 6. The urban and rural areas in the SCE service territory.
[Image courtesy of a CEC study (CEC-200-2013-007) prepared
by Navigant.]
ranged from a low of US$1 billion for DG installed mostly
in urban areas to a high of US$4.5 billion for DG installed
mostly in rural areas. This indicates that the integration
cost for local DG could be as high as US$1/W if the distrib-
uted PVs were installed in rural areas.
The SCE’s DG integration challenges and associated
costs are largely due to the incompatibility of the existing
grid infrastructure and the dramatic
change in power flows when many
distributed generators are intercon-
nected. The distribution upgrade
need is driven by the voltage impact
from the DGs. Without any surprise,
the studies found that voltage viola-
tions are lower when DG is installed
in urban areas, where feeders are
shorter and cables are thicker, and
much higher when DG is installed in
rural areas, where feeders are longer
and cables are thinner. Voltage viola-
tions are lower when DGs are evenly
distributed and higher when they are
clustered in one place, the worst
being at the end of a long feeder.
In 2013, SCE announced the per-
manent retirement of the San Onofre Nuclear Generating
Station, Units 2 and 3, which reduces the total generation in
the Los Angeles, California, area by a little more than 2 GW.
Unfortunately, this capacity gap cannot be filled completely
by distributed PV. Even though the grid is able to handle high-
er DG penetrations, there is not a sufficient PV resource local-
ly in the Los Angeles urban areas (see the “Los Angeles” data
point in Figure 2). Therefore, the lower-cost solution is not
achievable if PV is the primary resource. Other high-energy-­
density generation needs to be built locally, or it will be
­necessary to import electricity. In rural areas, the distributed
IEEE Elec trific ation Magazine / ma r c h 201 5 23
 PV should be able to meet 100% of the electricity need. The
DG integration costs will be lower if the distributed PV can be
evenly distributed along the feeder and sized to be compara-
ble with the loads.
Case Study 2: PV Microgrids in
Developing Countries
A recently published United Nations Foundation report
assessed the current state of rural microgrid best practices
in developing countries. The research team visited
12 microgrids in India, Malaysia, and Haiti and interviewed
seven developers. The report concludes that while “ade-
quately financed and operated microgrids based on renew-
able and appropriate resources can overcome many of the
challenges faced by traditional strategies of extending the
central grid, these projects can enter into virtuous or
vicious cycles.” It further concludes that “best practice with
respect to design is that developers should not design the
system based on pure technological considerations, but
instead adapt to the specific social and economic charac-
teristics of the rural community.”
These rural microgrids typically provide electricity ser-
vices with limited power and duration. In one example, the
standard microgrid service is two compact fluorescent
lights and one cell phone per household. A ­similar
microgrid project in India provides 6 h of street-­lighting and
charging services using PV and ­battery backup systems. In
this project, the levelized cost of electricity of the PV-battery
microgrid was estimated to be US$0.64/kWh compared
with US$1.35/kWh for diesel generation. The rural
microgrids are still expensive but are cheaper than the
alternatives. They are usually subsidized by governments or
nongovernment organizations. These microgrid projects
provide bare minimum services in remote rural places
where the centralized grid is not available or electricity is
not reliable even when there is centralized grid.
But it can be better. The model rural electric system pro-
posed earlier should be self-sustainable from both an energy
resource and economic perspective. The prices of PV, battery,
lighting, energy-efficient appliances, and communication are
all coming down rapidly, leveling the playing field for rural
communities. In addition to technologies and financing, edu-
cation is the key. The local community members will need to
learn and grasp the working knowledge of electricity genera-
tion, distribution, and balancing the load. They will need to
be savvy enough to operate and maintain the microgrid just
like the skilled workers in large utilities. And finally, they will
need to have the pride to keep the lights on.
Looking Forward
This is an exciting time for rural electrification. Recent
innovations in renewable generation, energy efficiency, and
grid modernization offer tremendous opportunities for the
development of new rural electric infrastructures that will
leapfrog the traditional centralized power systems, much
like the way digital networks leapt over the plain old
24 I E E E E l e c t ri f i c a t i on M a gaz ine / March 2015
t­elephone system during the telecom boom in the 1990s.
The abundance of sun, wind, water, and land resources in
rural areas, combined with these new methods of
­generating, storing, delivering, and consuming ­energy, hold
the promise that rural areas are not only able to meet their
own electricity demand through local ­generation but are
also able to export surplus energy to urban areas wherever
necessary. Further research, development, demonstration,
and deployment will be needed, however, because rural
electrification is a complex multidisciplinary problem that
requires a proper balance of technology, market mecha-
nisms, human capital, and effective regulatory policies. But
there is no question that rural electrification will undergo a
generational transformation into a more reliable, affordable,
and sustainable state in which new technologies and new
business models are fully embraced.
Disclaimer
The views and opinions expressed in this article are those
of the author and do not necessarily reflect the official
policy or position of any agency of the U.S. government.
For Further Reading
National Academy of Engineering (NAE). (2014, Nov.). Greatest
engineering achievements of the 20th century. [Online]. Avail-
able: www.greatachievements.org
International Energy Agency (IEA). (2011, Nov.). World energy
outlook 2011. [Online]. Available: www.­worldenergyoutlook.
org
NRECA. (2014, Nov.). Co-op facts and figures. [Online]. Avail-
able: http://www.nreca.coop/about-electric-cooperatives/
co-op-facts-figures/
D. J. C. MacKay, “Solar energy in the context of energy use,
energy transportation and energy storage,” Philosoph. Trans. R.
Soc. A, vol. 371, p. 20110431, July 2013.
T. l. Mai, D. Sandor, R. Wiser, and T. Schneider, “Renewable
electricity futures study: executive summary,” National
Renewable Energy Laboratory (NREL), Tech, Rep. NREL/TP-
6A20-52409-ES, 2012.
U.S. Energy Information Administration (EIA), “Annual ener-
gy outlook 2014 (AEO2014),” Tech. Rep. DOE/EIA-0383, May 2014.
E. Shlatz, N. Buch, and M. Chan, “Distributed generation
integration cost study: Analytical framework,” California Ener-
gy Commission, Tech. Rep. CEC-200-2013-007, 2013.
GridWise Architecture Council, “Gridwise transactive energy
framework DRAFT version,” Tech. Rep. PNNL-22946, Oct. 2013.
D. Schnitzer, D. S. Lounsbury, J. P. Carvallo, R. Deshmukh, J.
Apt, and D. M. Kammen. (2013, Feb.). Microgrids for rural elec-
trification: A critical review of best practices based on seven
case studies. UN Foundation Rep. [Online]. Available: http://
www.energyaccess.org/resources/key-documents
A. Skumanich, K. Polsani, P. Loka, S. Fulton, S. Reddy, S. Moola,
and S. P. Singh, “A microgrid case study: Lessons learned from a
rural electrification project in India,” in Proc. Renewable Energy
World Conf. Expo, Orlando, FL, Nov. 12–14, 2013, p. 20.
Biography
Guohui Yuan (Guohui.Yuan@ee.doe.gov) is with ManTech
International, supporting the Department of Energy Sun-
Shot Initiative, Washington, D.C.