Rural electrification

Based on Wikipedia: Rural electrification

In 1935, nine out of ten American farms had no electricity. Farmers lit their homes with kerosene lamps, pumped water by hand, and milked cows in darkness before dawn. Just thirty years later, nearly every farm in the country hummed with electric power. This transformation—one of the most dramatic infrastructure rollouts in history—wasn't inevitable. It required overcoming a fundamental economic problem that still leaves 770 million people worldwide in the dark today.

The Problem Nobody Wanted to Solve

Electric utilities looked at rural America and saw nothing but red ink. The math was brutal. In a city, a power company might string a single mile of wire and connect hundreds of paying customers. In farm country, that same mile of wire might reach two or three households. The cost per customer was simply too high.

This wasn't greed or indifference. It was market logic doing exactly what market logic does: allocating capital to its most profitable uses. City dwellers got electricity. Rural people got left behind.

The pattern repeats itself across the developing world today. National power grids radiate outward from cities, following the density of demand. They slow as they reach the countryside, then stop entirely. Extending the grid another hundred kilometers might double the infrastructure cost while adding only a fraction of the customers. Countries that already struggle to maintain their existing electrical systems simply cannot justify the expense.

But the expense of not electrifying may be even greater.

What Electricity Actually Changes

Consider light. Such a basic thing, so easy to take for granted. But in an unelectrified village, the day ends when the sun sets. Children cannot study after dark unless their families can afford kerosene lamps—which produce dim, flickering light and fill rooms with toxic fumes.

When electricity arrives, the school day effectively gets longer. Teachers in Kenya have described using the early morning and evening hours to cover material they couldn't fit into daylight hours. Schools with power can attract better teachers, who prefer not to work in places where they cannot charge their phones or refrigerate their food. Test scores rise. Graduation rates improve.

Then there's the matter of work. A farmer without electricity processes crops by hand, a labor-intensive job that limits how much land a family can cultivate. With electricity comes mechanization: water pumps for irrigation, mills for grinding grain, refrigeration for storing produce until prices improve. In 2014, researchers calculated that rural Indian communities gained more than twenty-one million dollars in economic activity from recent electrification projects.

Healthcare transforms perhaps most dramatically of all. In the villages of Diara Rhashalpool, a cluster of settlements along the Ganges River, roughly 140 households live without power. When someone falls ill, they face a two or three hour journey across the river just to reach a clinic with refrigerated vaccines or working medical equipment. With electricity, a local health post can maintain vaccine cold chains, sterilize instruments, and operate diagnostic equipment like ultrasound scanners or X-ray machines.

The effects compound. Telephone and television connections reduce isolation. Street lighting improves safety. Families stop spending money on expensive kerosene. Women and children, who traditionally gather fuel and carry water, gain hours in their day for education and economic activity.

The Red Wing Experiment

The transformation of rural America began with a modest experiment in Minnesota. In the early 1920s, a state committee partnered with the University of Minnesota's Department of Biosystems and Agricultural Engineering and Northern States Power Company to answer a simple question: could rural electrification actually pay for itself?

They selected nine farms near the town of Red Wing. On December 24, 1923—Christmas Eve—electricity flowed to these farms for the first time. The researchers tracked costs and benefits meticulously.

The results surprised the skeptics. Rural electrification was economically feasible. Not wildly profitable, perhaps, but sustainable. The findings influenced the federal government's eventual decision to support nationwide rural electrification.

Before that decision came, some farmers took matters into their own hands. A small but growing number installed wind-electric plants, particularly on the Great Plains where usable winds blow on most days. These systems typically used a forty-volt direct current generator to charge batteries stored in a barn or farmhouse basement. The power was modest—enough for lighting, washing machines, and limited refrigeration or water pumping—but it represented a kind of energy independence that grid-connected urbanites never experienced.

The Tennessee Valley and the New Deal

In 1933, President Franklin Roosevelt created the Tennessee Valley Authority, one of the most ambitious public works projects in American history. The TVA built dams to control flooding and generate hydroelectric power, but it also served a social purpose: bringing electricity to one of the poorest regions of the country.

The Tennessee Valley stretched across parts of seven states, a region of worn-out farmland, eroded hillsides, and grinding poverty. By creating the generation and transmission infrastructure that rural distribution systems needed, the TVA enabled a network of electric cooperatives to form. These cooperatives—member-owned organizations rather than profit-driven corporations—could operate at lower margins because their goal was service, not shareholder returns.

Two years later, Roosevelt created the Rural Electrification Administration by executive order. Congress authorized it formally in the 1936 Rural Electrification Act. The REA didn't build power plants or string wire itself. Instead, it made long-term, low-interest loans to state governments, local governments, farmers' cooperatives, and nonprofit organizations. These borrowers then built and operated the actual electrical systems.

The model was deliberately designed to avoid direct competition with private utilities. The government would provide capital that the market wouldn't, but the actual work would remain in local hands.

The results were dramatic. In the first four and a half years after the REA's establishment, the number of electrified farms more than doubled. By the early 1970s, approximately 98 percent of all American farms had electric service. A transformation that private markets had declared impossible took roughly three decades to complete.

Lessons from Brazil

The American model—government financing combined with local implementation—has influenced electrification efforts worldwide, though each country adapts it to local conditions.

Brazil's journey illustrates both the possibilities and the timelines involved. In 1981, about 75 percent of Brazilian households had electricity. The remaining quarter—tens of millions of people—lived mostly in rural areas, in the vast interior, in the Amazon basin, in the impoverished Northeast.

In 2000, the federal government under President Fernando Henrique Cardoso launched a program called Luz no Campo (Light in the Countryside) to extend electrical distribution to rural households. Three years later, President Luiz Inácio Lula da Silva reinforced and renamed the initiative Luz para Todos (Light for All).

By 2009, nearly 99 percent of Brazilian households had access to electricity. The country had effectively achieved universal electrification in less than three decades of concentrated effort.

The African Challenge

Sub-Saharan Africa presents the most difficult electrification challenges on Earth. Populations are dispersed. Terrain is often difficult. Government capacity is limited. Private capital is scarce and demands high returns that rural projects cannot provide.

Senegal's experience reveals the complexities. In 1998, the country reformed its electricity sector and launched a Rural Electrification Action Plan designed to maximize private investment. The plan succeeded spectacularly at attracting money—raising an average of 49 percent private financing over a decade, more than double the global average for energy access projects.

Yet during the same period, rural electrification levels increased by less than one percentage point.

What went wrong? Researchers identified a familiar pattern: institutional opposition, wavering support from government ministers, lengthy negotiations among stakeholders. An innovative policy framework ran headlong into the realities of bureaucratic politics. The money was there. The will was intermittent. The institutions weren't aligned.

Ethiopia took a different approach, with the government driving the process directly. Beginning in 1998, the country launched an ambitious Universal Electric Access Program aiming to electrify 6,000 villages in five years. The program created jobs, developed local contractors and cooperatives, and successfully increased rural access rates. Government financing, supplemented by international loans and supporting funds, provided the capital.

Kenya has emerged as a laboratory for innovative approaches. One promising method combines numerical electricity system modeling with geographic information systems to optimize the mix of grid extension, mini-grids, and standalone systems for different areas. Rather than treating grid extension as the only answer, planners can now calculate precisely which communities are better served by solar mini-grids and which justify the expense of connecting to the national grid.

A 2024 study evaluating solar mini-grids in Kenya found striking results. Median household income in electrified communities increased fourfold. Safety improved. Productivity rose. The social and economic impacts of even modest rural solar deployment proved substantial.

Beyond the Grid: New Technologies for Old Problems

The traditional model of rural electrification assumes that eventually, everyone will connect to the national grid. But what if that assumption is wrong? What if some communities are better served by independent power systems?

Renewable energy technologies have created new possibilities. Photovoltaic panels—solar cells that convert sunlight directly into electricity—have dropped in price by more than 99 percent since the 1970s. Small wind turbines can power individual homes or small clusters of buildings. Micro-hydropower systems, widely implemented in Nepal, Vietnam, and China, harness small streams and rivers to generate electricity without massive dam projects.

These technologies enable what engineers call mini-grids or micro-grids: small, independent electrical systems serving a village or group of villages. A mini-grid might combine solar panels with battery storage and a backup diesel generator, providing reliable power without any connection to the national grid.

Mini-grids can be built faster and cheaper than grid extensions. They don't require the massive infrastructure investments that strain developing country budgets. They can be scaled up incrementally as demand grows and communities can afford additional capacity.

Haiti offers an extreme example of where this approach might leapfrog traditional development. The country remains the least electrified in the Western Hemisphere—the Inter-American Development Bank estimated in 2020 that only 45 percent of the population had any access to electricity, and frequent fuel shortages mean real access is much lower. Even the nation's most important hospitals sometimes curtail services because they cannot obtain diesel for their generators.

Paradoxically, this very lack of existing infrastructure may be an advantage. With no legacy systems to protect or integrate, Haiti could build a modern, modular energy system from scratch. Solar-powered mini-grids, owned and operated by communities or private companies, could provide reliable electricity without waiting for a national grid that may never arrive.

The Networked Village Model

Researchers have proposed a hybrid approach that combines the advantages of local generation with the reliability of interconnection. In the Networked Rural Electrification Model, villages in a selected area are linked via an optimized network that connects to centralized generation facilities located at spots with superior renewable resources.

Each village receives power from two sources: a small local facility and the centralized plants. This redundancy improves reliability. If the village solar installation underperforms on a cloudy day, power flows in from elsewhere. If the centralized facility goes offline, local generation provides backup.

The challenge lies in designing the network itself. Connecting villages efficiently across difficult terrain requires sophisticated optimization—finding the routes that minimize construction costs while maximizing system reliability. Researchers have developed algorithms based on the A* pathfinding method (a technique originally created for computer game characters to navigate around obstacles) to evaluate all possible connections and identify the optimal network design.

The model acknowledges a fundamental truth about rural settlements: villages were established where they are for reasons that have nothing to do with energy. People settled near water, fertile soil, defensible positions, trade routes. The best locations for renewable energy generation—windy ridgelines, sunny plateaus, fast-flowing streams—may be kilometers away from where people actually live. A networked approach allows generation and consumption to be in different places.

Jamaica: The Last Three Percent

Jamaica illustrates the challenge of the final miles. The island's Rural Electrification Programme has operated since 1975, steadily extending the national grid to areas where commercial providers saw no profit. By 2012, the program had reached approximately 97 percent of the island.

That remaining three percent presented a different kind of problem. These communities were so remote, so distant from existing infrastructure, that grid extension became prohibitively expensive. Running power lines into these areas would cost more than the electricity they would ever consume.

The solution: photovoltaic systems. Rather than extending the grid, the government decided to deploy standalone solar installations. Energy Minister Phillip Paulwell announced in 2012 that approximately 16,000 homes in remote parts of the island would receive solar or wind electricity. By 2017, he predicted, the traditional grid-extension model would no longer be necessary. If the government found it too challenging to run power lines into a community, it would simply use solar.

This represents a fundamental shift in thinking about electrification. The goal is not grid connection but energy access. The wire is not sacred. What matters is that lights turn on and refrigerators run.

The Economic Multiplier

Electrification creates jobs in ways that extend far beyond the obvious. Yes, building power lines requires construction workers. Yes, installing solar panels creates installation jobs. But the larger economic effects ripple outward.

India set a target of 175 gigawatts of clean energy capacity by 2022, partly to increase electrification throughout the country. Analysts estimated this goal would require creating approximately 300,000 jobs—not just in construction and installation, but in manufacturing, logistics, maintenance, sales, and administration.

Then there are the jobs that electricity enables. A seamstress can work after dark. A mechanic can use power tools. A shopkeeper can keep perishable inventory in a refrigerator. A teacher can run an evening class. The productivity gains compound across an entire economy.

This is why economists sometimes describe electricity as a "general purpose technology"—a foundational innovation that enables countless other innovations and activities. Like the printing press, the steam engine, or the internet, electricity doesn't just do one thing. It transforms the possibility space of what people can do.

What 770 Million People Are Waiting For

As of 2019, approximately 770 million people worldwide—about one in ten humans—still lived without electricity. The number has declined substantially from historical peaks, but progress remains uneven. Sub-Saharan Africa and parts of South Asia account for the vast majority of the unelectrified population.

The barriers are familiar: high costs, dispersed populations, limited government capacity, insufficient private investment. But the barriers are not insurmountable. Country after country has demonstrated that with sustained political commitment, appropriate financing mechanisms, and willingness to adapt technologies to local conditions, rural electrification can succeed.

The American experience offers both inspiration and caution. Inspiration, because a country that declared rural electrification economically impossible in the 1920s achieved near-universal coverage by the 1970s. Caution, because it took decades of sustained effort, massive public investment, and institutional innovation to get there.

There are no shortcuts. But there are also no fundamental obstacles that technology and determination cannot overcome. The light that transformed American farms in the mid-twentieth century can reach every village on Earth. The question is not whether it is possible, but whether the world has the will to make it happen.