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Chapter II - The framework: Methodology and design for integrated energy planning for sustainable agriculture and rural development

35. The comprehensive multi-dimensional, integrated approach required for providing planned inputs of energy for the sustainable development of the rural areas of the developing countries at the least cost to the economy and environment, as proposed in the previous chapter, requires a framework in which energy is linked to economic plans, programmes and policies at the national level, on the one hand, and with the area-based, sustainable agricultural and rural development programmes at the grass roots and micro-level, on the other hand.

36. The conceptual linkages between micro-level energy planning for sustainable agriculture and rural development, and macro-level planning for energy, and for the total economy, as part of the framework, is given in the flow chart 1. The central feature of this framework, as noted above, is the preparation of area-based micro-level energy plans. The steps in preparing these area-based plans are as follows:

(a) Selection of the area.

(b) Assessment of energy consumption patterns in the region.

(c) Energy demand projections over a selected planning horizon.

(d) Assessment of energy supply resources originating from within and outside the micro-region.

(e) Techno-economic assessment of energy conversion technologies.

(f) Assessment of delivered cost and prices of energy alternatives over the planning horizon.

(g) Preparation of the area-based integrated rural energy plan for the micro-region, taking into account constraints in the availability of energy resources and technologies, the environmental impact of these resources and technologies, and the socio-cultural, agro-climatic and ecological characteristics of the micro-region.


37. The steps in the preparation of the area-based integrated rural energy plan are briefly discussed below:

i) Selection of the area

The unit of micro-level planning has to be decided after taking into account the broad economic and administrative set-up of the country. The size of the micro-planning unit has to be large enough to bring out the inter-relationship between development programmes and energy requirements for subsistence and production, and to justify the building up of a decentralized data base for the planning process. A village may be too small a planning unit in most countries because this unit would require a very large and disaggregated data base for the whole country; a collection or cluster of an appropriate number of villages, which also coincides with a local administrative unit, such as a block or municipal county, may be more suitable, especially if this micro-region also has specific ecological characteristics (28).

ii) Energy Surveys

Rural energy surveys provide the data from which the existing pattern of energy consumption for different end-uses for domestic consumption and productive activities are determined, and also an initial assessment of available energy resources and technologies are made. Several rural energy studies have been carried out in many developing countries by national and international agencies and groups, which provide the detailed methodology for such surveys. The survey formats, however, have to be modified to suit the specific situation of the country or, sometimes, of the micro-region being surveyed. The needs, priorities and socio-cultural preferences of the intended rural beneficiaries have to be assessed during these surveys. The Participatory Action Research Programme, sponsored by FAO, has developed useful methodology for such surveys, which can be appropriately modified and utilized for the specific country situation (29).

iii) Energy Demand Projections

Demand projections for energy have to be worked out for subsistence needs (i.e. cooking, heating and lighting) and for the economic development needs (including agricultural and non-agricultural productive activities) of the micro-region. Subsistence-level needs may be projected by taking into account existing consumption patterns, substitution possibilities and using norms, such as per capita energy consumption assumptions and increase of population growth for the region, as well as changes in consumption patterns as a result of increase in income and improvements in standards of living. Projections for energy requirements for economic development is, however, a complex exercise in which the needs and priorities of the rural beneficiaries have to be considered together with the existing and proposed development activities and programmes and other ongoing and proposed programmes for rural development programmes Energy requirements for agricultural production over the selected planning period have to take into account existing and proposed cropping patterns, level of farm mechanization, irrigation requirements, pre and post-harvesting operations as well as fertilizer requirements. The methodology for energy demand projections is in the developmental stages, though several working formats and models are now available Computer software packages for energy demand projections are also now available and are reported to have been utilized in some developing countries (30).

iv) Energy Supply Assessment

Assessment of all available energy resources over the planning horizon, including commercial sources of energy - wood, electricity, petroleum products, coal-based products (which may come from outside the area), non-commercial energy resources, which include traditional biomass resources - firewood, agricultural residues, manure and animal power, and the renewable energy resources - solar and wind energies, water (including streams and canal dropping), etc. - have to be made through separate detailed surveys and studies.

v) Energy Conversion Technologies

Energy conversion technologies for each resource, and for matching different end-uses, have to be assessed along with the availability of the corresponding energy resource options for different periods of the planning horizon. This assessment should include conversion efficiencies, performance criteria, operational features and other appropriate technical characteristics of each technology option. Only those technologies which are commercially available, or would become commercially available during the planning horizon, should be considered. While making the assessment of energy technologies, related inputs required to make the technology operational, including marketing and installation arrangements, repair and maintenance services, financing packages etc., may also be assessed to determine whether it would be viable to operate the technology in the micro-region in the time period under consideration. Some guidelines for technology assessment features have been given in Reference 31.

vi) Energy Costs and Prices Including Environmental Impact

The delivered cost, including the capital cost of resources and technology, based on assumptions of the life cycle for the option, and the interest rate used in the country's planning exercises, plus the annual operating and maintenance costs, as well as the cost of transportation and distribution, have to be worked out for each energy option. The administrative prices, as well as the financial and social costs for each option to (a) the user, (b) the area or micro-region, and (c) the country have also to he worked out, for different phases of the planning horizon. Environmental impact costs, where these can be quantified (e.g. cost of incorporating environmental safeguards in a particular energy option, for example petrol engines to control emissions), should be incorporated in the costs. The cost to the economy may include, where possible, the quantification or assessment of the environmental impact of the option. Where such quantification is not possible, some classification of the different options may be made in regard to their environmental implications, including the trade-offs between the impact of the option on the local environment and the global and regional environment (32).

vii) Energy Plan

An integrated rural energy plan is prepared on the basis of the above data for the micro-region. The plan should provide the energy resources and technologies needed to meet the different types of energy demand for subsistence and production activities for the different income groups in the micro-region, over the duration of the planning horizon, and at the least cost to the overall economy and the environment. Specific targets for the different commercial and renewable energy options including electricity, kerosene, wood, diesel, LPG, soft coke, solar heating equipment, wind pumps, biogas, etc., are worked out on the basis of this plan. A computer programming model may be used for preparing such micro-level optimal plans. Alternatively, a computer simulation model may be used for processing data and preparing alternative plans for different areas. However, if computing capabilities are not readily available, data from the surveys, and for the compilation of integrated rural energy plans can be processed manually, and steps may be taken for developing computer software packages suitable for the specific situation of the country with appropriate technical assistance (33).

38. The above steps provide the methodological outline for preparing area-based optimal rural energy plans. The final operational plan may differ from the optimal plan, because it would has to incorporate non-quantifiable variables to capture various socio-economic, cultural, and ecological considerations. Appropriate national policy objectives may be suitably incorporated in the exercise of preparing the final plan, for example by favouring those options which promote policy goals such as employment generation, improving the balance of payments, reducing the incremental capital output ratio, protection of the environment, etc. The final plan should thus provide feasible targets for different energy options which would most effectively meet the energy needs of a rural micro-region for subsistence and development, given the constraints of physical and financial resources, technology systems, and non-quantifiable socio-economic, cultural and environmental parameters.

39. The micro-level area-based plans, when implemented, will provide feed-back on the performance of different energy resources and technologies, and the response of the beneficiaries to the plan targets, which should be taken into account for mid-course corrections at the local and national level. As explained above, the micro-level plans provide the framework for linking energy supply programmes with operational programmes for agriculture and rural development. Micro-level planning and implementation exercises also provide grassroots data on energy requirements and programmes, which have to be compiled (as explained in the flow chart) at the provincial or state and national levels, for the preparation of comprehensive state-level and national plans for the rural energy sector. Resource allocations for the different rural energy programmes, and policy guidelines for the rural energy sector, may then be based on the feedback from this micro-level rural energy planning and implementation exercise, instead of the present practice of top down planning and policy making.

40. Thus the framework provides for a change in the focus from the central and the national level, to the decentralized micro-level in the formulation and implementation of programmes, including targets based on grassroots assessment and the active involvement of the prospective beneficiaries. The framework combines bottom up with top down planning, but, with the provision that the planning process originates and crystallizes at the micro-level, and policy directions are based on local, provincial and national considerations (34). The framework can, however, be made operational only after taking into account the existing set-up in the country, in regard to the implementation and institutional infrastructure under which energy and development programmes for rural areas and for the rest of the economy are now being carried out. This is discussed in the next Chapter.

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