Business Model Innovation

Topics: Renewable energy, Energy development, Electricity generation Pages: 32 (10764 words) Published: October 17, 2012
Energy Policy 48 (2012) 687–697

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Energy Policy
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An integrated framework for rural electrification: Adopting a user-centric approach to business model development Simon J.D. Schillebeeckx, Priti Parikh, Rahul Bansal, Gerard George n Business School, Imperial College London, South Kensington Campus, London SW7 2AZ, UK

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Review of two decades of rural electrification research. Content analysis of 232 scholarly articles. Literature is categorized into four focal lenses: technology, institutional, viability and user-centric. We develop a business model framework for rural electrification strategies.

a r t i c l e i n f o
Article history: Received 8 March 2012 Accepted 30 May 2012 Available online 22 June 2012 Keywords: Rural electrification Business model Customer

Rural electrification (RE) has gained prominence over the past two decades as an effective means for improving living conditions. This growth has largely been driven by socio-economic and political imperatives to improve rural livelihood and by technological innovation. Based on a content analysis of 232 scholarly articles, the literature is categorized into four focal lenses: technology, institutional, viability and user-centric. We find that the first two dominate the RE debate. The viability lens has been used less frequently, whilst the user-centric lens began to engage scholars as late as 2007. We provide an overview of the technological, institutional and viability lenses, and elaborate upon the user-centric lens in greater detail. For energy policy and practice, we combine the four lenses to develop a business model framework that policy makers, practitioners and investors could use to assess RE projects or to design future rural electrification strategies. & 2012 Elsevier Ltd. All rights reserved.

1. Introduction Rural electrification (RE) – the creation of electricity services in rural areas – has grown rapidly over the past two decades, both as a practice and as a field of academic research. Creating a better understanding of why RE projects are successful is important because electrification improves social, environmental and economic parameters of rural livelihood (World Bank, 2008c). For example, rural electrification is instrumental in achieving the Millennium Development Goals (Modi et al., 2005; Mustonen, 2010). Experience shows that on the social level, RE positively impacts: (a) the quality of lighting (World Bank, 2008c), (b) health by diminishing indoor exposure to particulate matter (Howells et al., 2005) and by extending clinic hours and strengthening the cold chain (ADB, 2010; World Bank, 2008c), (c) education outcomes, thanks to extended hours for study (ADB, 2010), (d) connectivity to the outside world via increased access to


Corresponding author. Tel.: þ44 20 7594 1876. E-mail address: (G. George).

television, radio and mobile phones (Deichmann et al., 2011; Yadoo et al., 2011) and even (e) social status (Chaieb and Ounalli, 2001). In terms of its effects on the environment, RE’s effect on deforestation – via wood as fuel for cooking – is contested (Balachandra, 2011; Lachman, 2011). However, the surge of renewable energy technologies (RETs) as valuable alternatives for conventional fossil fuel solutions reduces carbon emissions (Kaufman et al., 1999), making an overall positive impact on the environment more likely. Despite RE’s beneficial social and environmental impact, the economic case remains somewhat uncertain. Deichman and colleagues state that the connection between rural electrification and local revenue growth remains ‘‘largely anecdotal’’ (2011), which suggests that specific programs to promote productive uses should be incorporated in RE project design to stimulate economic growth (World Bank, 2008c). RE’s effect on poverty alleviation is doubtful as...
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