A Utility Approach to Accelerate Universal Electricity Access in Less Developed Countries: A Regulatory Proposal

Pérez-Arriaga, Ignacio J.; Stoner, Robert; Rahnama, Roxanne; Lee, Stephen J.; Jacquot, Grégoire; Protzer, Eric; González, Andrés Felipe Rojas; Amatya, Reja; Brusnahan, Matthew; Dueñas, Pablo; Santos, Francisco Javier Andrés

doi:10.5547/2160-5890.8.1.iper

Cited by 8 publications

(5 citation statements)

References 7 publications

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“…Due to their ability for operating stand‐alone, local energy markets are however more common in rural areas with no or unreliable access to transmission grids (Perez‐Arriaga et al . [2019]). Abundant examples of interconnecting off‐grid consumers in isolated local markets can currently be found in African and South‐Asian countries, such as Bangladesh, where pilot peer‐to‐peer trading is emerging amongst prosumer households.…”

Section: Introductionmentioning

confidence: 99%

“…While microgrids can work in stand-alone mode, they are also capable of interconnecting with other microgrids and, if available, to the greater distribution and transmission grid (Urpelainen [2014]). Due to their ability for operating stand-alone, local energy markets are however more common in rural areas with no or unreliable access to transmission grids (Perez-Arriaga et al [2019]). Abundant examples of interconnecting off-grid consumers in isolated local markets can currently be found in African and South-Asian countries, such as Bangladesh, where pilot peer-to-peer trading is emerging amongst prosumer households.…”

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confidence: 99%

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Local Energy Markets*

Baake,

Schwenen,

von Hirschhausen

2023

The J Industrial Economics

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In current power markets, the bulk of electricity is sold wholesale and transported to consumers via long‐distance transmission lines. Recently, decentralized local energy markets have evolved, often as isolated networks based on solar generation. We analyze strategic pricing, investment, and welfare in local energy markets. We show that local energy markets yield competitive equilibrium prices and provide efficient investment incentives. Yet, we find that strategic behavior leads to allocative inefficiency. We propose a clearing mechanism that induces truth‐telling behavior and restores first‐best welfare.

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Section: Introductionmentioning

confidence: 99%

mentioning

confidence: 99%

Local Energy Markets*

Baake,

Schwenen,

von Hirschhausen

2023

The J Industrial Economics

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“…The extent of the contribution of minigrids to the electrification challenge and their nexus with the grid [22][23][24][25][26][27][28][29][30][31][32][33] is still an open question among decision-makers in many countries. The first considered option is always grid extension, although in many developing countries is not viable because of the dire financial situation of distribution companies.…”

Section: Introduction and State Of The Artmentioning

confidence: 99%

“…The emergence of low-cost distributed generation for off-grid minigrids and standalone systems offers an efficient and technically possible alternative. However, the minigrid option involves dealing with new actors, technologies, business models, regulatory and policy frameworks, values, and cultural, environmental, and human factors [23,26].…”

Section: Introduction and State Of The Artmentioning

confidence: 99%

A Rising Role for Decentralized Solar Minigrids in Integrated Rural Electrification Planning? Large-Scale, Least-Cost, and Customer-Wise Design of Grid and Off-Grid Supply Systems in Uganda

et al. 2022

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Increasing Uganda’s low electrification rate is one of the country’s major challenges. Power service is essential to achieve socioeconomic development and poverty reduction, especially in rural areas. This paper shows the advantages of using an integrated (grid and off-grid) electrification model with high geospatial, temporal, and customer-class granularity as the Reference Electrification Model (REM). In universal electrification strategies, REM will help better ascertain the role of minigrids, jointly with grid extension, solar kits, and stand-alone systems. REM has been applied to the Southern Service Territory (SST) to determine the least-cost mix of electrification modes—grid extension, off-grid minigrids, and standalone systems—that satisfies the hourly demand requirements of each customer—residential, commercial, or industrial—considering its individual location. REM incorporates the existing grid layout, the hourly solar local profile, and the catalogs of actual components for network and generation designs. The paper shows that minigrids can provide grid-like service at a significantly lower cost in many circumstances and to a considerable extent. Therefore, minigrid strategies should play a more important role in electrification planning, both transitorily and on a permanent basis, particularly when the central grid suffers from frequent and prolonged blackouts.

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“…The work presented results that show that PV and diesel systems are the most economically viable method of rural electrification in Africa, while wind systems are economically advantageous only within the horn of Africa and across a few dispersed areas. Pérez-Arriaga et al presented a utility approach to accelerate universal electricity access in less developed countries-a regulatory proposal [16]. A large-scale business model designed to accelerate electricity access and attract corporate investment in electrification in developing countries was proposed.…”

Section: Introductionmentioning

confidence: 99%

Analysis of Hybrid Grid-Connected Renewable Power Generation for Sustainable Electricity Supply in Sierra Leone

et al. 2021

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The provision of electricity in a reliable and sustainable manner in provincial towns and villages in the small West Africa state of Sierra Leone requires the adoption of appropriate technologies. The rapid increase in electricity demand has generated great interest in how to tackle a possible long-lasting energy deficiency in the country. This paper aims at analyzing the techno-economic feasibility of a hybrid renewable energy system (HRES) for the sustainable rural electrification of Lungi Town, Port Loko District, Sierra Leone. Optimization, economic, reliability, and sustainability analyses were carried out using a genetic algorithm (GA), with the main objectives of minimizing the loss of power supply probability (LPSP) and cost of energy (COE). Three different case scenarios were configured, using a diesel generator (DG), wind/PV/DG/battery, and wind/PV/battery. Various combinations of these case scenarios were compared to determine which option was the most economically viable. In order to determine the case scenario with the lowest LPSP and COE, the operations and maintenance costs of the three cases were calculated. Using only DG for case one, the operations and maintenance cost amounted to USD 1,050,348.12/year. The operation and maintenance cost for case two, which included wind/PV/DG/battery, was found to be USD 561,674.06/year. The operations and maintenance cost for case three, which included wind/PV/battery, was found to be USD 36,000/year. In standalone microgrids, however, the use of renewable energy sources is not reliable due to the uncertainty of renewable energy sources. Consequently, the simulation results show that the wind/PV/DG/battery-based HRES is the most cost-effective, reliable, and sustainable for the specific location in comparison to the current traditional method of electricity generation. Since there is abundant solar radiation with substantial wind speeds across the country, this HRES can be applied in most rural and remote areas in place of the current diesel generators (DGs) that are widely deployed in the country.

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A Utility Approach to Accelerate Universal Electricity Access in Less Developed Countries: A Regulatory Proposal

Cited by 8 publications

References 7 publications

Local Energy Markets*

Local Energy Markets*

A Rising Role for Decentralized Solar Minigrids in Integrated Rural Electrification Planning? Large-Scale, Least-Cost, and Customer-Wise Design of Grid and Off-Grid Supply Systems in Uganda

Analysis of Hybrid Grid-Connected Renewable Power Generation for Sustainable Electricity Supply in Sierra Leone

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