IDEAS home Printed from https://ideas.repec.org/a/gam/jeners/v11y2018i4p813-d139140.html
   My bibliography  Save this article

Mini-Grids for the Base of the Pyramid Market: A Critical Review

Author

Listed:
  • Subhes C. Bhattacharyya

    (Institute of Energy and Sustainable Development, De Montfort University, The Gateway, Leicester LE1 9BH, UK)

Abstract

The lack of access to electricity of more than 1.1 billion people around the world remains a major developmental challenge and Goal 7 of the Sustainable Development Goals (SDG) as well as Sustainable Energy for All (SE4ALL) have set a target of universal electrification by 2030. Various studies have identified mini-grid-based electrification as a possible solution. There is a growing body of literature available now that has explored the feasibility, practical application and policy interventions required to support mini-grids. Through a review of available literature, this paper explores whether mini-grids can be a solution for the base of the pyramid (BoP) market and the challenges faced in deploying mini-grids in such markets. Interventions to support the mini-grid deployment are also discussed. The paper finds that the mini-grids are targeting the BoP market but the business is not attractive in profitability terms and requires financial support. Lack of regulatory clarity and non-coordinated policies affect the financial viability of projects, which requires careful support. Mini-grid electrification has hardly been embedded in rural development agenda and hence they have not contributed significantly to livelihood generation. Careful realignment of policies, regulatory frameworks and support systems can better support mini-grid deployment in developing countries.

Suggested Citation

  • Subhes C. Bhattacharyya, 2018. "Mini-Grids for the Base of the Pyramid Market: A Critical Review," Energies, MDPI, vol. 11(4), pages 1-21, April.
  • Handle: RePEc:gam:jeners:v:11:y:2018:i:4:p:813-:d:139140
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1996-1073/11/4/813/pdf
    Download Restriction: no

    File URL: https://www.mdpi.com/1996-1073/11/4/813/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Sen, Rohit & Bhattacharyya, Subhes C., 2014. "Off-grid electricity generation with renewable energy technologies in India: An application of HOMER," Renewable Energy, Elsevier, vol. 62(C), pages 388-398.
    2. Banerjee, Rangan, 2006. "Comparison of options for distributed generation in India," Energy Policy, Elsevier, vol. 34(1), pages 101-111, January.
    3. Nouni, M.R. & Mullick, S.C. & Kandpal, T.C., 2008. "Providing electricity access to remote areas in India: An approach towards identifying potential areas for decentralized electricity supply," Renewable and Sustainable Energy Reviews, Elsevier, vol. 12(5), pages 1187-1220, June.
    4. Domenech, B. & Ferrer-Martí, L. & Pastor, R., 2015. "Hierarchical methodology to optimize the design of stand-alone electrification systems for rural communities considering technical and social criteria," Renewable and Sustainable Energy Reviews, Elsevier, vol. 51(C), pages 182-196.
    5. 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.
    6. Urmee, Tania & Md, Anisuzzaman, 2016. "Social, cultural and political dimensions of off-grid renewable energy programs in developing countries," Renewable Energy, Elsevier, vol. 93(C), pages 159-167.
    7. Majbaul Alam & Subhes Bhattacharyya, 2016. "Decentralized Renewable Hybrid Mini-Grids for Sustainable Electrification of the Off-Grid Coastal Areas of Bangladesh," Energies, MDPI, vol. 9(4), pages 1-16, April.
    8. Chaurey, A. & Kandpal, T.C., 2010. "A techno-economic comparison of rural electrification based on solar home systems and PV microgrids," Energy Policy, Elsevier, vol. 38(6), pages 3118-3129, June.
    9. Dalton, G.J. & Lockington, D.A. & Baldock, T.E., 2008. "Feasibility analysis of stand-alone renewable energy supply options for a large hotel," Renewable Energy, Elsevier, vol. 33(7), pages 1475-1490.
    10. Alam, Majbaul & Bhattacharyya, Subhes, 2017. "Are the off-grid customers ready to pay for electricity from the decentralized renewable hybrid mini-grids? A study of willingness to pay in rural Bangladesh," Energy, Elsevier, vol. 139(C), pages 433-446.
    11. Chauhan, Anurag & Saini, R.P., 2016. "Techno-economic feasibility study on Integrated Renewable Energy System for an isolated community of India," Renewable and Sustainable Energy Reviews, Elsevier, vol. 59(C), pages 388-405.
    12. Mandelli, Stefano & Barbieri, Jacopo & Mereu, Riccardo & Colombo, Emanuela, 2016. "Off-grid systems for rural electrification in developing countries: Definitions, classification and a comprehensive literature review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 58(C), pages 1621-1646.
    13. Dufo-López, Rodolfo & Bernal-Agustín, José L. & Yusta-Loyo, José M. & Domínguez-Navarro, José A. & Ramírez-Rosado, Ignacio J. & Lujano, Juan & Aso, Ismael, 2011. "Multi-objective optimization minimizing cost and life cycle emissions of stand-alone PV–wind–diesel systems with batteries storage," Applied Energy, Elsevier, vol. 88(11), pages 4033-4041.
    14. Chakrabarti, Snigdha & Chakrabarti, Subhendu, 2002. "Rural electrification programme with solar energy in remote region-a case study in an island," Energy Policy, Elsevier, vol. 30(1), pages 33-42, January.
    15. Himri, Y. & Boudghene Stambouli, A. & Draoui, B. & Himri, S., 2008. "Techno-economical study of hybrid power system for a remote village in Algeria," Energy, Elsevier, vol. 33(7), pages 1128-1136.
    16. Palit, Debajit & Bandyopadhyay, Kaushik Ranjan, 2017. "Rural electricity access in India in retrospect: A critical rumination," Energy Policy, Elsevier, vol. 109(C), pages 109-120.
    17. Mathilde Brix Pedersen, 2016. "Deconstructing the concept of renewable energy-based mini-grids for rural electrification in East Africa," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 5(5), pages 570-587, September.
    18. Bhattacharyya, Subhes C., 2013. "To regulate or not to regulate off-grid electricity access in developing countries," Energy Policy, Elsevier, vol. 63(C), pages 494-503.
    19. 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.
    20. Zubi, Ghassan & Dufo-López, Rodolfo & Pasaoglu, Guzay & Pardo, Nicolás, 2016. "Techno-economic assessment of an off-grid PV system for developing regions to provide electricity for basic domestic needs: A 2020–2040 scenario," Applied Energy, Elsevier, vol. 176(C), pages 309-319.
    21. Bhattacharyya, Subhes C., 2006. "Renewable energies and the poor: niche or nexus?," Energy Policy, Elsevier, vol. 34(6), pages 659-663, April.
    22. Das, Barun K. & Hoque, Najmul & Mandal, Soumya & Pal, Tapas Kumar & Raihan, Md Abu, 2017. "A techno-economic feasibility of a stand-alone hybrid power generation for remote area application in Bangladesh," Energy, Elsevier, vol. 134(C), pages 775-788.
    23. Blechinger, P. & Cader, C. & Bertheau, P. & Huyskens, H. & Seguin, R. & Breyer, C., 2016. "Global analysis of the techno-economic potential of renewable energy hybrid systems on small islands," Energy Policy, Elsevier, vol. 98(C), pages 674-687.
    24. Henao, Felipe & Cherni, Judith A. & Jaramillo, Patricia & Dyner, Isaac, 2012. "A multicriteria approach to sustainable energy supply for the rural poor," European Journal of Operational Research, Elsevier, vol. 218(3), pages 801-809.
    25. Bhattacharyya, Subhes C., 2015. "Mini-grid based electrification in Bangladesh: Technical configuration and business analysis," Renewable Energy, Elsevier, vol. 75(C), pages 745-761.
    26. Roche, O.M. & Blanchard, R.E., 2018. "Design of a solar energy centre for providing lighting and income-generating activities for off-grid rural communities in Kenya," Renewable Energy, Elsevier, vol. 118(C), pages 685-694.
    27. Bernard Tenenbaum & Chris Greacen & Tilak Siyambalapitiya & James Knuckles, 2014. "From the Bottom Up : How Small Power Producers and Mini-Grids Can Deliver Electrification and Renewable Energy in Africa [Quand la lumière vient d'en bas : Comment les petits producteurs d'électric," World Bank Publications - Books, The World Bank Group, number 16571.
    28. Ramamurthi, Pooja Vijay & Fernandes, Maria Cristina & Nielsen, Per Sieverts & Nunes, Clemente Pedro, 2016. "Utilisation of rice residues for decentralised electricity generation in Ghana: An economic analysis," Energy, Elsevier, vol. 111(C), pages 620-629.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. 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).
    2. Rebekka Besner & Kedar Mehta & Wilfried Zörner, 2023. "How to Enhance Energy Services in Informal Settlements? Qualitative Comparison of Renewable Energy Solutions," Energies, MDPI, vol. 16(12), pages 1-22, June.
    3. Come Zebra, Emília Inês & van der Windt, Henny J. & Nhumaio, Geraldo & Faaij, André P.C., 2021. "A review of hybrid renewable energy systems in mini-grids for off-grid electrification in developing countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 144(C).
    4. Philomena Dadzie & Nicholas Bamegne Nambie & Belinda Ameh Obobi, 2023. "Impact of Petroleum Energy Price Volatility on Commodity Prices in Ghana," International Journal of Economics and Financial Issues, Econjournals, vol. 13(1), pages 73-82, January.
    5. Shakya, Bhupendra & Bruce, Anna & MacGill, Iain, 2019. "Survey based characterisation of energy services for improved design and operation of standalone microgrids," Renewable and Sustainable Energy Reviews, Elsevier, vol. 101(C), pages 493-503.
    6. Wen, Cheng & Lovett, Jon C. & Kwayu, Emmanuel J. & Msigwa, Consalva, 2023. "Off-grid households’ preferences for electricity services: Policy implications for mini-grid deployment in rural Tanzania," Energy Policy, Elsevier, vol. 172(C).
    7. Abba, Z.Y.I. & Balta-Ozkan, N. & Hart, P., 2022. "A holistic risk management framework for renewable energy investments," Renewable and Sustainable Energy Reviews, Elsevier, vol. 160(C).
    8. Andrés González-García & Pedro Ciller & Stephen Lee & Rafael Palacios & Fernando de Cuadra García & José Ignacio Pérez-Arriaga, 2022. "A Rising Role for Decentralized Solar Minigrids in Integrated Rural Electrification Planning? Large-Scale, Least-Cost, and Customer-Wise Design of Grid and Off-Grid Supply Systems in Uganda," Energies, MDPI, vol. 15(13), pages 1-31, June.
    9. Namujju, Lillian Donna & Acquah-Swanzy, Henrietta & Ngoti, Irene F., 2023. "An IAD framework analysis of minigrid institutions for sustainable rural electrification in East Africa: A comparative study of Uganda and Tanzania," Energy Policy, Elsevier, vol. 182(C).
    10. Bukari, Dramani & Kemausuor, Francis & Quansah, David A. & Adaramola, Muyiwa S., 2021. "Towards accelerating the deployment of decentralised renewable energy mini-grids in Ghana: Review and analysis of barriers," Renewable and Sustainable Energy Reviews, Elsevier, vol. 135(C).
    11. Blessing Ugwoke & Adedoyin Adeleke & Stefano P. Corgnati & Joshua M. Pearce & Pierluigi Leone, 2020. "Decentralized Renewable Hybrid Mini-Grids for Rural Communities: Culmination of the IREP Framework and Scale up to Urban Communities," Sustainability, MDPI, vol. 12(18), pages 1-26, September.
    12. Gill-Wiehl, A. & Miles, S. & Wu, J. & Kammen, D.M., 2022. "Beyond customer acquisition: A comprehensive review of community participation in mini grid projects," Renewable and Sustainable Energy Reviews, Elsevier, vol. 153(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Abhi Chatterjee & Daniel Burmester & Alan Brent & Ramesh Rayudu, 2019. "Research Insights and Knowledge Headways for Developing Remote, Off-Grid Microgrids in Developing Countries," Energies, MDPI, vol. 12(10), pages 1-19, May.
    2. Mandelli, Stefano & Barbieri, Jacopo & Mereu, Riccardo & Colombo, Emanuela, 2016. "Off-grid systems for rural electrification in developing countries: Definitions, classification and a comprehensive literature review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 58(C), pages 1621-1646.
    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. William López-Castrillón & Héctor H. Sepúlveda & Cristian Mattar, 2021. "Off-Grid Hybrid Electrical Generation Systems in Remote Communities: Trends and Characteristics in Sustainability Solutions," Sustainability, MDPI, vol. 13(11), pages 1-29, May.
    5. 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).
    6. Hartvigsson, Elias & Stadler, Michael & Cardoso, Gonçalo, 2018. "Rural electrification and capacity expansion with an integrated modeling approach," Renewable Energy, Elsevier, vol. 115(C), pages 509-520.
    7. Chambon, Clementine L. & Karia, Tanuj & Sandwell, Philip & Hallett, Jason P., 2020. "Techno-economic assessment of biomass gasification-based mini-grids for productive energy applications: The case of rural India," Renewable Energy, Elsevier, vol. 154(C), pages 432-444.
    8. Bruno Domenech & Laia Ferrer‐Martí & Rafael Pastor, 2019. "Comparison of various approaches to design wind‐PV rural electrification projects in remote areas of developing countries," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 8(3), May.
    9. Bukari, Dramani & Kemausuor, Francis & Quansah, David A. & Adaramola, Muyiwa S., 2021. "Towards accelerating the deployment of decentralised renewable energy mini-grids in Ghana: Review and analysis of barriers," Renewable and Sustainable Energy Reviews, Elsevier, vol. 135(C).
    10. He, Li & Zhang, Shiyue & Chen, Yizhong & Ren, Lixia & Li, Jing, 2018. "Techno-economic potential of a renewable energy-based microgrid system for a sustainable large-scale residential community in Beijing, China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 93(C), pages 631-641.
    11. Bahramara, S. & Moghaddam, M. Parsa & Haghifam, M.R., 2016. "Optimal planning of hybrid renewable energy systems using HOMER: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 62(C), pages 609-620.
    12. Lahimer, A.A. & Alghoul, M.A. & Yousif, Fadhil & Razykov, T.M. & Amin, N. & Sopian, K., 2013. "Research and development aspects on decentralized electrification options for rural household," Renewable and Sustainable Energy Reviews, Elsevier, vol. 24(C), pages 314-324.
    13. Joshi, Lalita & Choudhary, Deepak & Kumar, Praveen & Venkateswaran, Jayendran & Solanki, Chetan S., 2019. "Does involvement of local community ensure sustained energy access? A critical review of a solar PV technology intervention in rural India," World Development, Elsevier, vol. 122(C), pages 272-281.
    14. Sheridan, Steve & Sunderland, Keith & Courtney, Jane, 2023. "Swarm electrification: A comprehensive literature review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 175(C).
    15. Rahmat Khezri & Amin Mahmoudi & Hirohisa Aki & S. M. Muyeen, 2021. "Optimal Planning of Remote Area Electricity Supply Systems: Comprehensive Review, Recent Developments and Future Scopes," Energies, MDPI, vol. 14(18), pages 1-29, September.
    16. García-Villoria, Alberto & Domenech, Bruno & Ferrer-Martí, Laia & Juanpera, Marc & Pastor, Rafael, 2020. "Ad-hoc heuristic for design of wind-photovoltaic electrification systems, including management constraints," Energy, Elsevier, vol. 212(C).
    17. López-González, A. & Domenech, B. & Ferrer-Martí, L., 2018. "Sustainability and design assessment of rural hybrid microgrids in Venezuela," Energy, Elsevier, vol. 159(C), pages 229-242.
    18. Alam, Majbaul & Bhattacharyya, Subhes, 2017. "Are the off-grid customers ready to pay for electricity from the decentralized renewable hybrid mini-grids? A study of willingness to pay in rural Bangladesh," Energy, Elsevier, vol. 139(C), pages 433-446.
    19. Aberilla, Jhud Mikhail & Gallego-Schmid, Alejandro & Stamford, Laurence & Azapagic, Adisa, 2020. "Design and environmental sustainability assessment of small-scale off-grid energy systems for remote rural communities," Applied Energy, Elsevier, vol. 258(C).
    20. Narula, Kapil & Nagai, Yu & Pachauri, Shonali, 2012. "The role of Decentralized Distributed Generation in achieving universal rural electrification in South Asia by 2030," Energy Policy, Elsevier, vol. 47(C), pages 345-357.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jeners:v:11:y:2018:i:4:p:813-:d:139140. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.