Rural electrification through mini-grids: Challenges ahead

Jörg Peters, Maximiliane Sievert and Michael Toman ()

No 781, Ruhr Economic Papers from RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen

Abstract: Recent debates on how to provide electricity to the roughly one billion still unconnected people in developing countries have identified mini-grids as a promising way forward. High upfront costs of transmission lines are avoided, and unlike home-scale solar, mini-grids can provide sufficient electricity for productive uses. This note outlines the challenges the mini-grid sector faces to achieve that potential. To date, few examples of sustainably working mini-grid programs exist. We identify regulatory issues, low electricity demand in rural areas, high payment default rates and over-optimistic demand projections as among the key challenges. Business models that account for high transaction costs in rural areas and are based on realistic demand forecasts could considerably increase the commercial viability of village grids.

Keywords: public infrastructure; rural electrification; energy planning systems (search for similar items in EconPapers)
JEL-codes: H54 O13 O21 Q48 (search for similar items in EconPapers)
Date: 2018
New Economics Papers: this item is included in nep-agr and nep-ene
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/190950/1/1045531871.pdf (application/pdf)

Related works:
Journal Article: Rural electrification through mini-grids: Challenges ahead (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:rwirep:781

DOI: 10.4419/86788909

Access Statistics for this paper

More papers in Ruhr Economic Papers from RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().