Rural Energy Projects under CDM

Scott Griffiths    

Rural poverty is one of the largest development challenges India faces today—75 percent of the 269 million Indians below the national poverty line live in rural communities.  Recently, the UN Commission on Sustainable Development and other international bodies have advocated a causal link between energy deprivation and rural poverty.  As a result, India has an increased motivation to supply the 87,000 non-electrified rural villages—or 69% of all rural households—with sustainable energy. The Clean Development Mechanism (CDM), as prescribed under the Kyoto Protocol, could be the spark that India needs to light up its rural communities.

The purpose of the CDM is two-pronged: to help developing countries achieve their sustainable development goals and allow developed countries to take advantage of economical emission reduction projects outside their national borders.  In order to ensure that CDM projects achieve their first goal, they must be approved by governments of developing countries in accordance with national sustainable development criteria.  Each country will define CDM project requirements in terms of ecological and economic sustainability as well as social justice.

Although increasing access to energy can increase the quality of life in rural communities, no causal relationship exists.  Unsuccessful rural energy projects are marked by low adaptation rates, due to the lack of compatibility with the surrounding social context.  In India, the National Programme for Improved Chulas (cookstoves) (NPIC) has been beneficial in communities where it had a high adaptation rate, but an evaluation by the National Council of Applied Economic Research (NCAER) in 1993 revealed that only 55.6% of the 30.9 million cookstoves installed nationally were actually in use.  Private projects that follow in the footsteps of NPIC will not meet the sustainability criteria set out by the Indian government and consequently, not qualify under CDM.  As a result, a new model for rural energy projects, which is consistent with India’s sustainable development goals, must be defined. This article will overview India’s sustainability criteria for CDM projects, present three characteristics that rural energy projects should embue in order to meet these criteria, and suggest compatible project options, which could be implemented as rural energy CDM projects.

Sustainability guidelines for CDM projects

India was one of the first developing countries to publish specific sustainable development criteria for CDM projects.  As shown in Table 1, these criteria require that CDM reporting includes indicators to measure social, economic, environmental and technological well-being.  Definitions of these terms are given in Table 1 as well. Under these guidelines, projects should focus on the development priorities of specific communities, while reducing  emissions.

A new model for rural energy planning

Participatory energy planning

In order to be eligible for CDM, rural energy projects need to be participatory.  A participatory rural energy project involves project stakeholders—individuals or organisations who have an interest in developing an energy system or are significantly affected by its impacts—in all stages of the project.  As communities are the most significant stakeholders in the development of energy systems, they should play a key role in selecting, purchasing, operating and maintaining the final system.

A participatory model for energy planning should incorporate the development priorities of the local community, rather than simply consult the community at each stage of the project.  The Indian Ministry of Non-conventional Energy Sources has found that rural energy programmes can only be truly effective if they contribute to the development priorities of the targeted people.  Projects that address community energy needs within the context individual development priorities—which may lie in income generation, employment or basic infrastructure—will tend to have higher adoption rates and will contribute to sustainable development.

The Energy and Resources Institute (TERI), India published a guide on participatory rural energy strategies for NGOs and governments embarking on rural energy projects.  The publication cites a study which has found that most rural energy projects fail because of the inadequate socio-economic knowledge in project preparation and use of culturally-biased and incompatible technical design.  These problems can be overcome by using the following participatory strategy to implement the project:

1. Rapport establishment
2. Needs assessment
3. Set objectives of intervention
4. Problem analysis
5. Project design
6. Monitoring and evaluation

Another tool used to promote stakeholder participation in rural energy projects is the participatory Rural Assessment (PRA).  The PRA includes a growing collection of participatory approaches that enable local communities to design their own projects by using local knowledge.  It encompasses approaches such as questionnaires, discussions, mapping and diagramming, which focus on qualitative data.  Using PRA techniques will help ensure that the ultimate energy solution meets the needs of the community and furthers the sustainability of the project.

Table 1 : Sustainable Development Guidelines for CDM Projects in India

Social well-being The CDM project activity should lead to alleviation of poverty by generating additional employment, removing social disparities and contributing to the provision of basic amenities to people, which will lead to improvement in their quality of life.
Economic well-being The CDM project activity should bring additional investment consistent with the needs of the people.
Environmental well-being The CDM project activity should report the impact of the project activity on resource sustainability, biodiversity and human health; any resulting resource degradation; and any reduction of pollution levels in general.
Technology well-being The CDM project activity should lead to transfer of environmentally safe and sound technologies with a priority to the renewable energy sector or energy efficiency projects that are comparable to best practices in order to assist in the upgrading of technology.

Decentralised energy planning

The framework of decentralised energy planning logically follows from the need for community participation in rural energy projects.  A decentralised rural energy paradigm means that villages rely on energy sources that are locally available, rather than receiving electricity from a remote power plant.  The use of local energy sources facilitates reliance on traditional ecological knowledge (TEK) and reinforces the capacity of communities to manage their own energy supply.

The shift from large-scale energy projects to decentralised energy planning has taken place for two reasons.  First, centralised energy projects over the past two decades have to significantly improve the quality of life in rural communities, despite significant financial and institutional investment. Second, the incumbent rural energy framework is centred on biomass, which is inherently decentralised in nature.  Extending this paradigm from its current focus of household biomass combustion to an integrated energy supply model that includes community electricity generation would improve the quality of life of rural people and be more economical than extending the central electricity grid.  Although biomass will play a major role in rural energy development, planners should still examine other appropriate technologies that are locally available.

Renewable energy sources

By extending the current power grid to rural communities, more energy consumers will rely on carbon-intensive energy sources and emissions from electricity generation will increase.  This model of electrification will not contribute to the emission reduction goals of developed countries, nor will it encourage sustainable development in developing countries.  Hence, if rural energy projects are to qualify as CDM initiatives, they must be based on renewable energy sources.

As previously stated, biomass combustion is the method of energy generation in most rural households.  Although biomass combustion is a form of renewable energy, there are unsustainable characteristics of the status quo.  First, the majority of biomass is currently burnt in open fires or inefficient cookstoves, which have large emission factors.  Second, biomass is the only renewable if it is harvested in a sustainable manner, which is generally not the case where forests are owned and managed by government agencies.  The effects of unsustainable harvesting are forest degradation and depleted biodiversity.  Consequently, although the majority of rural communities currently use a “renewable” energy source, improvements on the current rural energy model are necessary for it to be sustainable.


Rural energy CDM projects

The Asia Least-cost Greenhouse Gas Abatement Strategy (ALGAS) project was commissioned by the United National Development Programme and Global Environment Facility and implemented by the Asian Development Bank.  One objective of ALGAS was to identify cost-effective technologies for reducing GHGs.  Since CDM projects must be more financially attractive to Annex II countries than GHG abatement projects in their respective countries, ALGAS recommendations are likely to be viable CDM projects.

ALGAS identified 15 cost-effective GHG abatement project areas for India.  Six of these projects fit the rural energy model described above, as they are based on renewable energy technologies and could be implemented in a decentralised fashion using participatory methods:

q Small hydro power generation
q Biomass power generation
q Solar photovoltaic cells
q Improved cookstoves
q Residential solar cookers
q Residential biogas plants

Development Alternatives and the International Institute for Sustainable Development have jointly developed an approach to rural energy that could be a viable CDM alternative.  The “ecosystems approach” for rural energy promotes ecological conservation and rural development through the appropriate management of environmental and social resources.  This methodology is based on a decentralised biomass model and uses the PRA to incorporate local knowledge and conditions into the project design.


The CDM will give developing countries an additional incentive to provide rural communities with reliable energy sources.  However, energy solutions cannot be modelled on past projects, which had unsustainable social and environmental consequences.  In the case of India, projects must increase social, economic, environmental and technological well-being in the involved communities.  These criteria will promote decentralised, renewable energy projects that use participatory planning techniques as acceptable CDM projects.  Projects that include these characteristics will contribute to sustainable development in developing countries as well as help developed countries achieve their GHG emissions targets under the Kyoto Protocol.     q


Selected References 

A User’s Guide to the CDM. The Pembina Institute, Drayton Valley: 2003. 

Asia Least-cost Greenhouse Gas Abatement Strategy: India.  Asian Development Bank, Manila: 1998. 

Chatterjee, K. “Climate Change Mitigation Projects in India: Incorporating sustainable development concerns.” Development Alternatives, New Delhi: 2000. 

“Government of India interim approval criteria.” Ministry of Environment and Forests, Government of India, 2003.  [Online]  

Malhotra, P., Dutta, S., and Ramana, P. V. Participatory Rural Energy Planning: A Handbook. Tata Energy Research Institute, New Delhi: 1998.

The author is an intern from the International Institute for Sustainable Development, Canada, funded by the Canadian International Development Agency.     

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