Opportunities for decentralised solar power to improve reliability, reduce emissions and avoid stranded assets

Abstract

Abstract Despite recent improvements to electricity access in lower-income countries, reliability remains low for many. Local renewable electricity infrastructure supplementing the national grid offers a promising route to improved reliability for rural communities. However, improvements in the reliability of national grids create risks for investors including the possibility of “stranded” renewable assets. We use energy-system modelling to explore ways in which solar photovoltaic (PV)-based mini-grids could be interconnected with national grids. We explore the impact of reduced electricity demand to quantify the investment risks of losing customers. Our results indicate that national grid–connected mini-grids can reduce the unit electricity costs for communities whilst also increasing reliability and reducing the carbon intensity of electricity in line with Sustainable Development Goal (SDG) 7. Reductions in demand have a minimal impact at lower levels but at moderate levels are likely to undermine economic viability. Finally, we discuss policy interventions to facilitate and protect investing in national grid-connected mini-grids.