A country’s national energy policy should include a national electricity policy, a rural electrification strategy and master plan. This should pave the way for the relevant energy and electricity laws and regulations.
National electricity policy
The main goal of a national electricity or electrification policy is to move a country closer to universal and sustainable access to modern electricity services. Rural electrification can either be addressed as part of the national electricity policy or formulated in a separate rural electrification policy.
Depending on a country’s electricity sector structure and objectives (electrification rates, population distribution and density, national grid coverage and expansion plans), the national electrification policy could set out a special role for mini-grids to reach unserved rural areas with safe, reliable, affordable and environmentally-friendly electricity supply. Such a policy could help meet the national electrification goals and achieve long-term sustainable rural development.
Rural electrification strategy and master plan
National electrification targets are more likely to be achieved if a dedicated rural electrification strategy and master plan (RESMP) is developed and implemented by a dedicated government agency (e.g. a Rural Electrification Agency or similar).
The goal of a RESMP is to develop a rural electrification strategy that delivers the least-cost energy access options for consumers and provides them with the best possible level of service, considering their location and demand. The RESMP should define the government’s plans regarding the rural areas to be electrified, how they will be electrified (e.g. by extension of the national grid, mini-grids, or distributed solar stand-alone systems), and a clear timetable for implementation. The RESMP should cover a clearly defined period (typically spanning two to three decades) and needs to be periodically reviewed and adapted to changing conditions. For mini-grids, the RESMP should provide visibility on the areas where mini-grids can be feasible and a market for mini-grids can be facilitated.
Energy and electricity laws
Most parliamentary and presidential systems of government make use of primary or enabling legislation and secondary legislation or legally enforceable regulations. Primary legislation is created by the legislative branch of government and generally consists of statutes or acts that set out broad outlines and principles. For example, an energy or electricity law establishes the legal and regulatory framework for the generation, transmission, distribution and sales of electricity.
The legislative branch of government usually delegates specific authority to an executive branch to make more specific laws and regulations under the framework of the primary legislation. For example, an electricity law usually includes acts to establish an electricity regulatory agency or other implementing agencies and delegates powers to them to enforce the law. They can then issue secondary legislation, creating legally-enforceable rules and regulations, including specific mini-grid regulations, and the procedures for implementing them.
The mini-grid regulations outline the conditions for operating in the mini-grid market and should create an enabling framework for private investors and mini-grid operators. Apart from “rules” and “regulations”, regulators may also issue “guidelines”, which are non-binding instructions for regulated entities. Regulators issue licences, authorising market entry of regulated entities, as well as “orders” or “decisions” on different matters from time to time. Such licenses, orders or decisions have the force of law and may provide legal precedent for future decisions.
Mini-Grid Policy Toolkit: Policy and Business Frameworks for Successful Mini-Grid Roll-outs (2014)