Solar PV mini-grids versus large-scale embedded PV generation: A case study of Uttar Pradesh (India)

Subhes C. Bhattacharyya, Debajit Palit, Gopal K. Sarangi, Vivek Srivastava and Prerna Sharma

Energy Policy, 2019, vol. 128, issue C, 36-44

Abstract: Despite significant grid expansion during the last decade, globally India has the highest number of people lacking access to electricity. Mini-grid has been suggested as a possible electrification option and the new mini-grid policy of the state of Uttar Pradesh has attracted global attention. Relatedly, the drive for grid extension restricts off-grid areas to very remote locations and enhances the risks for mini-grid projects. Simultaneously, the pledge for increasing renewable energy share in the power supply mix opens the possibility of large-scale embedded renewable energy generation in the rural areas. This paper investigates the viability of solar PV-based mini-grids using a discounted cash flow analysis and considers the UP-policy prescriptions to explore the case of a megawatt (MW)-scale grid-connected solar PV under a power purchase agreement. It identifies the viability support requirements for both cases under different business conditions. It finds that mini-grids are not a viable proposition if the tariff prescribed in UP is used and that other cost minimising support (such as capital subsidy or low interest debt or an output-based subsidy) would be required to attract private investments. Large-scale solar projects, on the other hand, are more viable and can be an attractive proposition for rural electrification in the Indian context.

Keywords: Solar mini-grids; Large-scale solar PV; Viability; Rural electrification; Support systems (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:128:y:2019:i:c:p:36-44

DOI: 10.1016/j.enpol.2018.12.040

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