Rural electrification through village grids: Assessing the cost competitiveness of isolated renewable energy technologies in Indonesia

Blum, Nicola Ursina; Sryantoro Wakeling, Ratri; Schmidt, Tobias S. (2013). Rural electrification through village grids: Assessing the cost competitiveness of isolated renewable energy technologies in Indonesia Renewable and Sustainable Energy Reviews, 22, pp. 482-496. Elsevier 10.1016/j.rser.2013.01.049

Text 1-s2.0-S136403211300097X-main.pdf - Published Version Restricted to registered users only Available under License Publisher holds Copyright. Download (627kB) | Request a copy

Isolated grids in rural areas powered by independent renewable energy sources (‘renewable energy based village grids’) are widely considered a clean and sustainable solution for Indonesia’s rural electrification challenge. Despite the advantages of renewable energy based village grids, the number of conventional rural electrification solutions – such as costly grid extension (on-grid) or diesel powered village grids (off-grid) which are characterized by high operating costs and high greenhouse gas emissions – is much larger. One reason for the low diffusion of renewable energy based village grids can be attributed to the lack of private sector investments, leaving the responsibility of rural electrification predominantly on the shoulders of the government who often prefer the centralized and conventional solutions. To better understand this situation in this paper we perform a literature review on the economics of renewable energy based village grids in Indonesia, which reveals a gap in terms of cost data. Therefore, we calculate the levelized cost of electricity (LCOE) of solar photovoltaic (solar PV) and micro hydro powered village grids, and compare them to the conventional diesel solution. For solar PV, we additionally investigate different system configurations including a reduced supply contingency and a hybridization approach. Finally, we determine the CO 2 emission abatement costs and reduction potentials. Our results show that micro hydro powered village grids are more competitive than diesel powered solutions (at least when taking out Diesel and other subsidies). Solar PV powered solutions increase their competitiveness with the remoteness of the village grid is and when reduced supply contingency is applied. From an environmental perspective, micro hydro powered village grid solutions are found to have negative abatement costs with significant potential to reduce emissions. We conclude by discussing our results addressing the question which measures could support private investments into renewable energy-based village grids.

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:	Blum, Nicola Ursina; Sryantoro Wakeling, Ratri and Schmidt, Tobias S.
ISSN:	1364-0321
Publisher:	Elsevier
Language:	English
Submitter:	Nicola Ursina Blum
Date Deposited:	29 May 2024 11:30
Last Modified:	29 May 2024 11:30
Publisher DOI:	10.1016/j.rser.2013.01.049
ARBOR DOI:	10.24451/arbor.21774
URI:	https://arbor.bfh.ch/id/eprint/21774