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Assessment of instruments in facilitating investment in off-grid renewable energy projects

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  • Shi, Xunpeng
  • Liu, Xiying
  • Yao, Lixia

Abstract

Renewable off-grid solution plays a critical role in supporting rural electrification. However, off-grid Renewable Energy (OGRE) project financing faces significant challenges due to limited financing access, low affordability of consumers, high transactions costs and etc. Various supporting instruments have been implemented to facilitate OGRE investment. This study assesses the effectiveness of those instruments with a framework consists of three dimensions: feasibility, sustainability and replicability. The weights of each dimension in the framework and the scores of each instrument are assessed by expert surveys based on the Delphi method. It is suggested that all the three dimensions should be taken into consideration while assessing the instruments, among which feasibility and sustainability are considered as the most important dimensions in the assessment framework. Furthermore, the top-5 most effective instruments in facilitating OGRE investment are local engagement in operation and maintenance, loan guarantee, start-up grant, end user financing, and concessional finance. Developing countries that need to increase electrification, such as most of the ASEAN member states, could use these top scored instruments despite of their limited amount of public finance.

Suggested Citation

  • Shi, Xunpeng & Liu, Xiying & Yao, Lixia, 2016. "Assessment of instruments in facilitating investment in off-grid renewable energy projects," Energy Policy, Elsevier, vol. 95(C), pages 437-446.
    • Handle: RePEc:eee:enepol:v:95:y:2016:i:c:p:437-446
    DOI: 10.1016/j.enpol.2016.02.001
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    More about this item

    Keywords

    Off-grid renewable energy; Rural electrification; Investment facilitation;
    All these keywords.

    JEL classification:

    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • Q47 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy Forecasting
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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