IDEAS home Printed from https://ideas.repec.org/a/eee/rensus/v22y2013icp482-496.html
   My bibliography  Save this article

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

Author

Listed:
  • Blum, Nicola U.
  • Sryantoro Wakeling, Ratri
  • Schmidt, Tobias S.

Abstract

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 CO2 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.

Suggested Citation

  • Blum, Nicola U. & 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, Elsevier, vol. 22(C), pages 482-496.
    • Handle: RePEc:eee:rensus:v:22:y:2013:i:c:p:482-496
    DOI: 10.1016/j.rser.2013.01.049
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S136403211300097X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.rser.2013.01.049?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. van Alphen, Klaas & van Sark, Wilfried G.J.H.M. & Hekkert, Marko P., 2007. "Renewable energy technologies in the Maldives--determining the potential," Renewable and Sustainable Energy Reviews, Elsevier, vol. 11(8), pages 1650-1674, October.
    2. Tobias S. Schmidt & Robin Born & Malte Schneider, 2012. "Assessing the costs of photovoltaic and wind power in six developing countries," Nature Climate Change, Nature, vol. 2(7), pages 548-553, July.
    3. Rumbayan, Meita & Abudureyimu, Asifujiang & Nagasaka, Ken, 2012. "Mapping of solar energy potential in Indonesia using artificial neural network and geographical information system," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(3), pages 1437-1449.
    4. Annabelle Mourougane, 2010. "Phasing Out Energy Subsidies in Indonesia," OECD Economics Department Working Papers 808, OECD Publishing.
    5. Peters, Michael & Schmidt, Tobias S. & Wiederkehr, David & Schneider, Malte, 2011. "Shedding light on solar technologies'A techno-economic assessment and its policy implications," Energy Policy, Elsevier, vol. 39(10), pages 6422-6439, October.
    6. Hasan, M.H. & Muzammil, W.K. & Mahlia, T.M.I. & Jannifar, A. & Hasanuddin, I., 2012. "A review on the pattern of electricity generation and emission in Indonesia from 1987 to 2009," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(5), pages 3206-3219.
    7. Glemarec, Yannick, 2012. "Financing off-grid sustainable energy access for the poor," Energy Policy, Elsevier, vol. 47(S1), pages 87-93.
    8. Reinders, A. H. M. E. & Pramusito & Sudradjat, A. & van Dijk, V. A. P. & Mulyadi, R. & Turkenburg, W. C., 1999. "Sukatani revisited: on the performance of nine-year-old solar home systems and street lighting systems in Indonesia," Renewable and Sustainable Energy Reviews, Elsevier, vol. 3(1), pages 1-47, March.
    9. van Ruijven, Bas J. & Schers, Jules & van Vuuren, Detlef P., 2012. "Model-based scenarios for rural electrification in developing countries," Energy, Elsevier, vol. 38(1), pages 386-397.
    10. Kaundinya, Deepak Paramashivan & Balachandra, P. & Ravindranath, N.H., 2009. "Grid-connected versus stand-alone energy systems for decentralized power--A review of literature," Renewable and Sustainable Energy Reviews, Elsevier, vol. 13(8), pages 2041-2050, October.
    Full references (including those not matched with items on IDEAS)

    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. Spiros Papaefthimiou, Manolis Souliotis, and Kostas Andriosopoulos, 2016. "Grid parity of solar energy: imminent fact or future's fiction," The Energy Journal, International Association for Energy Economics, vol. 0(Bollino-M).
    2. Ondraczek, Janosch, 2014. "Are we there yet? Improving solar PV economics and power planning in developing countries: The case of Kenya," Renewable and Sustainable Energy Reviews, Elsevier, vol. 30(C), pages 604-615.
    3. 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.
    4. Labordena, Mercè & Patt, Anthony & Bazilian, Morgan & Howells, Mark & Lilliestam, Johan, 2017. "Impact of political and economic barriers for concentrating solar power in Sub-Saharan Africa," Energy Policy, Elsevier, vol. 102(C), pages 52-72.
    5. Schmidt, Tobias S. & Battke, Benedikt & Grosspietsch, David & Hoffmann, Volker H., 2016. "Do deployment policies pick technologies by (not) picking applications?—A simulation of investment decisions in technologies with multiple applications," Research Policy, Elsevier, vol. 45(10), pages 1965-1983.
    6. Bolukbasi, Gizem & Kocaman, Ayse Selin, 2018. "A prize collecting Steiner tree approach to least cost evaluation of grid and off-grid electrification systems," Energy, Elsevier, vol. 160(C), pages 536-543.
    7. Ondraczek, Janosch & Komendantova, Nadejda & Patt, Anthony, 2015. "WACC the dog: The effect of financing costs on the levelized cost of solar PV power," Renewable Energy, Elsevier, vol. 75(C), pages 888-898.
    8. Hanieh Seyedhashemi & Benoît Hingray & Christophe Lavaysse & Théo Chamarande, 2021. "The Impact of Low-Resource Periods on the Reliability of Wind Power Systems for Rural Electrification in Africa," Energies, MDPI, vol. 14(11), pages 1-18, May.
    9. Pode, Ramchandra, 2013. "Financing LED solar home systems in developing countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 25(C), pages 596-629.
    10. Patil, Vikas R. & Biradar, Vijay Irappa & Shreyas, R. & Garg, Pardeep & Orosz, Matthew S. & Thirumalai, N.C., 2017. "Techno-economic comparison of solar organic Rankine cycle (ORC) and photovoltaic (PV) systems with energy storage," Renewable Energy, Elsevier, vol. 113(C), pages 1250-1260.
    11. Brunet, Carole & Savadogo, Oumarou & Baptiste, Pierre & Bouchard, Michel A., 2018. "Shedding some light on photovoltaic solar energy in Africa – A literature review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 96(C), pages 325-342.
    12. Hoppmann, Joern & Volland, Jonas & Schmidt, Tobias S. & Hoffmann, Volker H., 2014. "The economic viability of battery storage for residential solar photovoltaic systems – A review and a simulation model," Renewable and Sustainable Energy Reviews, Elsevier, vol. 39(C), pages 1101-1118.
    13. Gómez-Hernández, D.F. & Domenech, B. & Moreira, J. & Farrera, N. & López-González, A. & Ferrer-Martí, L., 2019. "Comparative evaluation of rural electrification project plans: A case study in Mexico," Energy Policy, Elsevier, vol. 129(C), pages 23-33.
    14. Aquila, Giancarlo & Nakamura, Wilson Toshiro & Junior, Paulo Rotella & Souza Rocha, Luiz Celio & de Oliveira Pamplona, Edson, 2021. "Perspectives under uncertainties and risk in wind farms investments based on Omega-LCOE approach: An analysis in São Paulo state, Brazil," Renewable and Sustainable Energy Reviews, Elsevier, vol. 141(C).
    15. Poudel, B. & Maley, J. & Parton, K. & Morrison, M., 2021. "Factors influencing the sustainability of micro-hydro schemes in Nepal," Renewable and Sustainable Energy Reviews, Elsevier, vol. 151(C).
    16. Monfared, Mohammad & Golestan, Saeed, 2012. "Control strategies for single-phase grid integration of small-scale renewable energy sources: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(7), pages 4982-4993.
    17. Battke, Benedikt & Schmidt, Tobias S. & Grosspietsch, David & Hoffmann, Volker H., 2013. "A review and probabilistic model of lifecycle costs of stationary batteries in multiple applications," Renewable and Sustainable Energy Reviews, Elsevier, vol. 25(C), pages 240-250.
    18. Lang, Tillmann & Gloerfeld, Erik & Girod, Bastien, 2015. "Don׳t just follow the sun – A global assessment of economic performance for residential building photovoltaics," Renewable and Sustainable Energy Reviews, Elsevier, vol. 42(C), pages 932-951.
    19. Tobias Schmidt & Sandeep Dabur, 2014. "Explaining the diffusion of biogas in India: a new functional approach considering national borders and technology transfer," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 16(2), pages 171-199, April.
    20. Elizabeth Baldwin & Jennifer N. Brass & Sanya Carley & Lauren M. MacLean, 2015. "Electrification and rural development: issues of scale in distributed generation," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 4(2), pages 196-211, March.

    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:eee:rensus:v:22:y:2013:i:c:p:482-496. 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: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/600126/description#description .

    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.