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The elusive quest for sustainable off-grid electrification: New evidence from Indonesia

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Listed:
  • Duthie, Mike
  • Ankel-Peters, Jörg
  • Mphasa, Carly
  • Bhat, Rashmi

Abstract

High hopes are pinned to mini-grids for rural electrification, especially in remote and sparsely populated areas. This note presents new evidence from a large evaluation of a US Millennium Challenge Corporation investment into mini-grids in Indonesia. We find that, a few years after commissioning, many mini-grids in the program do not operate properly, corroborating older concerns about the sustainability of mini-grids and off-grid energy systems that have been voiced for several years. Operational costs are typically high and electricity demand low. Minigrid programs should take these structural challenges into account, and especially abstain from overly optimistic electricity demand projections.

Suggested Citation

  • Duthie, Mike & Ankel-Peters, Jörg & Mphasa, Carly & Bhat, Rashmi, 2023. "The elusive quest for sustainable off-grid electrification: New evidence from Indonesia," Ruhr Economic Papers 1049, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    • Handle: RePEc:zbw:rwirep:279545
    DOI: 10.4419/96973218
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    References listed on IDEAS

    as
    1. Kenneth Lee & Edward Miguel & Catherine Wolfram, 2020. "Experimental Evidence on the Economics of Rural Electrification," Journal of Political Economy, University of Chicago Press, vol. 128(4), pages 1523-1565.
    2. 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).
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    4. Florian Egli & Churchill Agutu & Bjarne Steffen & Tobias S. Schmidt, 2023. "The cost of electrifying all households in 40 Sub-Saharan African countries by 2030," Nature Communications, Nature, vol. 14(1), pages 1-10, December.
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    6. Trotter, Philipp A. & Cooper, Nathanial J. & Wilson, Peter R., 2019. "A multi-criteria, long-term energy planning optimisation model with integrated on-grid and off-grid electrification – The case of Uganda," Applied Energy, Elsevier, vol. 243(C), pages 288-312.
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    More about this item

    Keywords

    Energy access; sustainability; infrastructure; mini-grids;
    All these keywords.

    JEL classification:

    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O21 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Planning Models; Planning Policy
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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