Attracting private investments into rural electrification — A case study on renewable energy based village grids in Indonesia

Schmidt, Tobias S.; Blum, Nicola Ursina; Sryantoro Wakeling, Ratri (2013). Attracting private investments into rural electrification — A case study on renewable energy based village grids in Indonesia Energy for Sustainable Development, 17(6), pp. 581-595. Elsevier 10.1016/j.esd.2013.10.001

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Renewable energy based village grids (RVGs) are widely considered to be a sustainable solution for rural electrification in non-OECD countries. However, diffusion rates of RVGs are relatively low. We take the viewpoint that, as public resources are scarce, investments from the private sector are essential to scale-up the diffusion. While existing literature mostly focuses on engineering, development and techno-economic aspects, the private sector's perspective remains under-researched. As investment decisions by private investors are mainly based on the risk/return profile of potential projects we — based on literature reviews and field research — investigate the risk and the return aspects of RVGs in Indonesia, a country with one of the largest potentials for RVGs. We find that considering the potential of local, national and international revenue streams, the returns of RVGs can be positive. Regarding the risk aspect, we see that private investors could address many of the existing barriers through their business model. However, the findings also point to the need for government action in order to further improve the risk/return profile and thereby attract private investments for RVGs.

Item Type:	Journal Article (Original Article)
Division/Institute:	Business School > Institute for Sustainable Business Business School > Institute for Sustainable Business > Social Innovation Business School
Name:	Schmidt, Tobias S.; Blum, Nicola Ursina and Sryantoro Wakeling, Ratri
Subjects:	G Geography. Anthropology. Recreation > G Geography (General) H Social Sciences > HB Economic Theory T Technology > TK Electrical engineering. Electronics Nuclear engineering
ISSN:	2352-4669
Publisher:	Elsevier
Submitter:	Nicola Ursina Blum
Date Deposited:	29 May 2024 12:16
Last Modified:	29 May 2024 12:16
Publisher DOI:	10.1016/j.esd.2013.10.001
Related URLs:	Publication
Uncontrolled Keywords:	Off-grid Mini-grid Micro-grid Risk/return profile Investment barrier Subsidy
ARBOR DOI:	10.24451/arbor.21772
URI:	https://arbor.bfh.ch/id/eprint/21772