Rural electrification and capacity expansion with an integrated modeling approach

TitleRural electrification and capacity expansion with an integrated modeling approach
Publication TypeJournal Article
Year of Publication2018
AuthorsElias Hartvigsson, Michael Stadler, Gonçalo Cardoso
JournalRenewable Energy
Volume115
Pagination509-520
Date Published01/2018
KeywordsDER-CAM, Rural electrification, System dynamics Mini-grids
Abstract

In developing countries, mini-grids are seen as an important option to improve electrification rates in rural areas. In order to be successful, mini-grids face issues of operation and sizing of generation capacities. Current studies on the optimal sizing of mini-grids do not include capacity expansion feedbacks regarding the operator's or investor's long-term economic performance on growth in electricity usage, e.g. gap between demand and supply impacting the operator's income. Using a System Dynamics model, this paper compares the impact from two capacity expansion strategies on rural mini-grid operator's long-term economic performance. The two capacity expansion strategies are: a strategy with minimized costs and a strategy where only diesel power is allowed. Research shows that a cost-minimized capacity expansion strategy might not be the most beneficial solution for the operator's long term financial performance. Specifically, the high investment costs prohibit the implementation of the cost-minimized expansion strategy. In addition, the diesel-only expansion strategy suffers from high operational costs, which creates long-term challenges as the share of diesel increase. Therefore, the timeline of the investments and when to implement different strategies is important, creating a benefit for a System Dynamics approach.

DOI10.1016/j.renene.2017.08.049