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

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

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.

Suggested Citation

  • Bhattacharyya, Subhes C. & Palit, Debajit & Sarangi, Gopal K. & Srivastava, Vivek & Sharma, Prerna, 2019. "Solar PV mini-grids versus large-scale embedded PV generation: A case study of Uttar Pradesh (India)," Energy Policy, Elsevier, vol. 128(C), pages 36-44.
    • Handle: RePEc:eee:enepol:v:128:y:2019:i:c:p:36-44
    DOI: 10.1016/j.enpol.2018.12.040
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    References listed on IDEAS

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    1. Bhattacharyya, Subhes C. & Palit, Debajit, 2016. "Mini-grid based off-grid electrification to enhance electricity access in developing countries: What policies may be required?," Energy Policy, Elsevier, vol. 94(C), pages 166-178.
    2. Bhattacharyya, Subhes C., 2013. "Financing energy access and off-grid electrification: A review of status, options and challenges," Renewable and Sustainable Energy Reviews, Elsevier, vol. 20(C), pages 462-472.
    3. Comello, Stephen D. & Reichelstein, Stefan J. & Sahoo, Anshuman & Schmidt, Tobias S., 2017. "Enabling Mini-Grid Development in Rural India," World Development, Elsevier, vol. 93(C), pages 94-107.
    4. Ramchandran, Neeraj & Pai, Rajesh & Parihar, Amit Kumar Singh, 2016. "Feasibility assessment of Anchor-Business-Community model for off-grid rural electrification in India," Renewable Energy, Elsevier, vol. 97(C), pages 197-209.
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    Cited by:

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    5. Palit, Debajit & Kumar, Atul, 2022. "Drivers and barriers to rural electrification in India – A multi‐stakeholder analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 166(C).
    6. Saranchimeg, Sainbold & Nair, Nirmal K.C., 2021. "A novel framework for integration analysis of large-scale photovoltaic plants into weak grids," Applied Energy, Elsevier, vol. 282(PA).
    7. Bhattacharyya, S.C. & Palit, D., 2021. "A critical review of literature on the nexus between central grid and off-grid solutions for expanding access to electricity in Sub-Saharan Africa and South Asia," Renewable and Sustainable Energy Reviews, Elsevier, vol. 141(C).
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