CHINA ELECTRICITY ACCESS MODEL: Rural Electrification in Context

By Sanusi M. Ohiare and Subhes C. Bhattacharyya

The economic and infrastructural disparities between the rural and urban communities of most developing countries in general and in terms of energy access in particular are quite glaring. China presents a good example of a developing country that has successfully embarked on rural electrification and energy projects over the last few decades and achieved a great feat of almost 100% electrification rate (IEA 2009). The purpose of this analysis is to find out how China has achieved this feat; how China’s rural energy projects were financed and whether China provides lessons for other countries to follow.

The above questions are examined through an extensive literature review and the entire analysis finds that unlike many other countries following the top-down approach to rural electrification, China has preferred to use a phased development through a bottom-up approach where local resources, and village level development and empowerment played an important role. While the state has provided the overall guidance and financial support, the integrated rural development approach has produced local-level solutions that are subsequently integrated to produce an alternative development pathway. Strong government commitment, active local participation, technological flexibility and diversity, strong emphasis on rural development through agricultural and industrial activities and an emphasis on capacity building and training have also played an important role in the success. However, despite achieving the universal access objective, China still faces a number of issues related to rural electricity use, especially in terms of regional use patterns, long-term sustainability of supply and commercial operation of the systems. The Chinese model could serve as an inspiration for other developing countries trying to ensure universal electricity access.

It is now widely recognised in the development policy circles that the access to clean energy is a prerequisite to economic development of developing countries. With more than 1.4 billion people (i.e. about 22% of the global population) not having access to electricity in 2008 (IEA, 2009), the scale of the problem cannot be over-emphasised.  Interestingly, the most populous country in the world, China, has achieved a very impressive record in providing electricity, with only 8 million of its population (or about 0.6% of its population) lacking the facility at present. Our curiosity about this extra-ordinary performance led us to inquire more about the Chinese experience to see how China managed such an impressive feat and whether other countries can also benefit from its experience. This is the main purpose of this whole analysis.

This treatise specifically asks three questions:

a)      What is the Chinese model for electricity access and how it managed to provide access to all of its population despite being a very large and populous country?

b)     How did China finance its rural electrification programme?

c)      What are the critical success factors behind the Chinese success, and what lessons others can learn from the Chinese experience?

The treatise tries to answer these questions through a thorough literature review[1] and is organised as follows:  a review of the status of electrification in China. This historical development is divided into three phases to capture the politico-socio-economic changes in the country. It also presents the technological choices and organisational arrangements. Another section of the analysis discusses how China financed its rural electrification over the past five decades. Another part then identifies the critical success factors and lessons for others, while some concluding remarks are given last.

Review of rural electrification status and process in China

To answer the first question (i.e. how China provided electricity access to its billion plus population?), we review the status of electrification and the electrification process in the country since 1949. This stylised historical review is aimed at capturing the evolution, identifying the technical choices, and highlighting the organisational arrangements and policies used. 

Status

China has a long experience of rural electrification and has been successful in providing access to 900 million people over a period of 50 years (Peng and Pan, 2006). But the success in rural electrification started since 1979 when the economic reform began from rural areas. The rural areas in China accounted for only 0.66% of national electricity consumption until 1957 but the level increased to 13.31% by 1978 (Yang, 2003). More than 50% of the farmers did not have access to electricity at that time and the per capita energy consumption in rural areas was one-fifth of that of the urban areas (Zheng et al, 2002). But the country recorded a rapid growth in electricity use in rural areas since then and the share of rural electricity consumption increased to 31.55% by 1987.  The country achieved a tremendous success in ensuring electricity access to 95.5% of households by 1997 (Yang 2003). According to IEA (2010), about 12 million people lacked electricity in China by early 2006, while the latest statistics from the National Energy Administration suggest that 2 million households still lack access – this represents a population of 9 to 10 million. The government intends to use off-grid and decentralized options to electrify the remaining areas by 2020.

Figure 1 presents the growth in rural electricity use in China, which clearly indicates an exponential growth, with rapid progress in the new millennium. To put the information in perspective, the annual electricity consumption in the UK is typically about 400 TWh. Rural China consumed about 1.5 times of this volume in 2007. Surely, the challenge and scale is very different in China.

Fig. 1: Electricity consumption in rural China

Source: China Statistical Yearbook, 2010

Although we focus on electricity here, it must be noted that electricity still plays a minor role in rural China and accounts for about 10% of all energy consumption. The rest is provided by coal, oil and non-commercial energy[2]. An exponential growth can be observed in the overall rural energy use as well (see Fig. 2), with coal and non-commercial energies supplying 41% and 31% respectively in 2007[3]. Moreover, there is significant spatial variation in electricity use – especially between the northern and southern regions (Zhang, et al, 2009a). In per capita terms, rural energy consumption is almost one half of that the national average but the accelerated growth rate of rural energy consumption points towards a possibility of role reversal in the future (Yang et al, 2010). However, we do not focus on these aspects here. 

Fig. 2: Rural energy trend in China

Source: Zhang et al (2009b).

NUTSHELL:
This article is the first of a seven-part treatise on the Chinese electricity access model for rural electrification with a view to studying the approaches, experience and lessons to be learned. In this particular article, Sanusi has set the context for the study by giving a general background of the China rural electricity consumption status. In the next instalment, he will review the Chinese rural electrification process and discuss the Grid-based and Off-grid electricity supply. For more information on this article and to view Sanusi's professional profile, click here -->

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[1] This paper is based on documents available in English. Although this is a limitation given the volume of Chinese documents on the subject, I don’t believe this has adversely affected the content of the paper significantly.  

[2] See Luo (2004) for a general discussion on rural energy in China.

[3] See Zhang et al (2009b), which provides the data for the period between 1979 and 2007. This is a good source of information on rural energy in China.