Abstract
BackgroundIt is widely accepted that electricity is an important element for improving levels of human development and wealth creation in rural areas. Yet, little research has explored the conditions under which electrification could lead to wealth creation post-electrification. Using Kenya as a case study, this paper uses natural capital (NC) and infrastructural capital (IC) data to compare the enabling environments under which electrification could lead to wealth creation (and persistent demand for electricity) post-electrification.MethodsWe use multiple spatial data sets to create three different metrics for NC and IC and use them to create a micro-enterprise development index (MED index). NC data is composed of water body data (major rivers and access to irrigation infrastructure), soil data (soil quality and agro-ecological potential), and agricultural data (crop intensity and diversity). IC is composed of spatial data spanning major towns, first and second tier roads, electricity infrastructure (transmission grid, location of government, and entrepreneur run off-grid electrification projects), population density, access to education, trade centers (markets), healthcare, and access to financial services. We perform feature scaling on NC and IC data and use them to create a MED index, which we use to represent the potential for rural micro-enterprises to create wealth, post-electrification. We compare this spatial proxy to a nightlights GDP per capita proxy developed by the World Bank in 2015 and provide a discussion highlighting the benefits and drawbacks of our approach and of using nightlights as a single metric for wealth in rural areas.ResultsIn Kenya, infrastructural capital follows natural capital. Regions with greater natural capital have relatively higher development and penetration of infrastructural capital. We observe a large discrepancy between our MED index and the nightlights income proxy, which could be caused by an underestimate of economic activity by nightlights, and an overestimate by the MED index, being that it is a measure of “potential” wealth (as opposed to current wealth).ConclusionsA spatial aggregation of natural and infrastructural capital, and nightlights data, could be an accurate demand-side input for electrification supply-side models including grid-expansion and off-grid strategies.
Highlights
There are currently many ongoing efforts that are working towards enabling off-grid electricity access for over 1.2 billion people across the world
Using spatial analysis of natural capital (NC) and infrastructural capital (IC) data, this paper explores the enabling environments of entrepreneur vs. government run off-grid electrification projects, explores the role that NC and IC can play in determining wealth creation post-electrification, and develops a micro-enterprise development potential index, indicating areas in Kenya where NC and IC could be well positioned for communities to derive a panoply of social cobenefits after initial electrification
This paper was written to begin developing an understanding of the enabling environments of entrepreneur vs. government run off-grid electrification projects, explore the role that NC and IC can play in determining wealth creation post-electrification, and attempt to develop a micro-enterprise development (MED) index that could be used to guide top-down energy planners and offgrid energy access entrepreneurs in Kenya
Summary
There are currently many ongoing efforts that are working towards enabling off-grid electricity access for over 1.2 billion people across the world. This paper does not debate the benefits of electrification via a traditional centralized approach (transmission grid) vs decentralized off-grid solutions (pico-power, solar home systems, and microgrids) but rather explores the conditions under which electrification can lead to long-term sustainability and socially beneficial outcomes. Despite the widely accepted notion that electricity is “a necessary but not sufficient condition” for development, there is very little research that explores electrification beyond the household and the conditions under which wealth creation can occur, human development outcomes can improve, and small businesses and micro-entrepreneurs can flourish. Most of the literature that investigates off-grid energy demand primarily focuses on the household This focus has had a positive impact on the development of novel strategies through which many households in East Africa, and many other regions across the world, have received access to modern electricity services including pico power, solar home systems, and microgrids. We briefly summarize demand- and supply-side methodologies for off-grid electrification, as well as provide brief introduction to the literature that explores the electricity-entrepreneurship nexus with a particular focus on Kenya
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