Tariff-setting Approaches for Rural Electrification

The Clean Energy Solutions Center, in partnership with African Association for Rural Electrification (CLUB-ER), hosted this webinar on tariff-setting strategies and considerations for isolated mini-grids in rural electrification contexts.

Many countries around the world are working to expand electricity access to all citizens, and they are often involving a blend of efforts to extend national electric grids, develop grid-connected or off-grid mini-grids, and deploy stand-alone systems such as solar home systems. According to the International Energy Agency, just over half of the world’s rural population that is without access to electricity would be best served by mini-grids. To encourage growth in the deployment of these mini-grids, however, countries must adopt sound policy and regulation that provides the necessary ingredients for market expansion while ensuring mini-grid customers are treated fairly. Most countries do not have dedicated regulatory practices in place for mini-grid development. Many have not established a regulatory approach to isolated mini-grid tariff-setting, which demands different practices and considerations than regulating inter-connected mini-grids or national-grid utilities.

This webinar covered best practices in isolated mini-grid tariff-setting and provided attendees with resources to use in adopting international best practices. The webinar addressed the following issues:

• Differences between mini-grid and national grid tariff-setting
• Approaches to determining optimal tariff levels
• Approaches for setting tariff structures
• Options for implementing social tariffs and considering cross-subsidies
• Illustrative examples in mini-grid regulation in international contexts.

The webinar presentations were followed by an interactive question-and-answer session with the audience.