IDEAS home Printed from https://ideas.repec.org/a/gam/jeners/v16y2023i2p958-d1036031.html

Identifying Economic and Clean Strategies to Provide Electricity in Remote Rural Areas: Main-Grid Extension vs. Distributed Electricity Generation

Author

Listed:
  • Bandar Jubran Alqahtani

    (Nicholas School of the Environment, Duke University, Durham, NC 27708, USA)

  • Dalia Patino-Echeverri

    (Nicholas School of the Environment, Duke University, Durham, NC 27708, USA)

Abstract

The policy decision of extending electric power transmission lines to connect a remote area to a primary grid vs. developing local electricity generation resources must be informed by studies considering both alternatives’ economic and environmental outcomes. Such analysis must also consider the uncertainty of several factors such as fuel prices, the cost and performance of renewable and conventional power generation technologies, and the value of environmental benefits. This paper presents a method for this analysis, making two main contributions to the literature. First, it shows how to characterize the two alternatives (i.e., main-grid extension vs. local power generation) in detail for precise quantification of their capital and operating costs while guaranteeing that they are both adequate to meet forecast demand and operating reserves. Second, it shows how to properly account for the economic and environmental implications of renewable energy intermittency and uncertainty through the optimization of capital investments and hourly operations. The method is illustrated by applying this analysis method to Saudi Arabia, where the government is struggling to outline a strategy to meet residential and commercial loads reliably and sustainably in the country’s remote, scattered, isolated areas. To meet this demand, the Saudi government is considering two main alternatives: (1) extending the primary power transmission grid; or (2) installing an optimal combination of off-grid distributed generation (DG) resources, including solar PV, wind, diesel, oil, heavy fuel oil, and Li-ion batteries, to generate the electricity locally. Results suggest that under most scenarios of capital costs, fuel prices, and costs of air pollution, developing a microgrid with a large share of wind and solar power is more cost-effective than extending a primary grid 150 km or more away. Extending a primary grid powered by gas-fired combined-cycle power plants is more economical only if the load is not very high, the distance is not more than 350 km, and oil prices are relatively high compared to natural gas.

Suggested Citation

  • Bandar Jubran Alqahtani & Dalia Patino-Echeverri, 2023. "Identifying Economic and Clean Strategies to Provide Electricity in Remote Rural Areas: Main-Grid Extension vs. Distributed Electricity Generation," Energies, MDPI, vol. 16(2), pages 1-18, January.
    • Handle: RePEc:gam:jeners:v:16:y:2023:i:2:p:958-:d:1036031
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1996-1073/16/2/958/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1996-1073/16/2/958/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Bouffard, François & Kirschen, Daniel S., 2008. "Centralised and distributed electricity systems," Energy Policy, Elsevier, vol. 36(12), pages 4504-4508, December.
    2. O. Schmidt & A. Hawkes & A. Gambhir & I. Staffell, 2017. "The future cost of electrical energy storage based on experience rates," Nature Energy, Nature, vol. 2(8), pages 1-8, August.
    3. Oparaku, O.U., 2003. "Rural area power supply in Nigeria: A cost comparison of the photovoltaic, diesel/gasoline generator and grid utility options," Renewable Energy, Elsevier, vol. 28(13), pages 2089-2098.
    4. Molyneaux, Lynette & Wagner, Liam & Foster, John, 2016. "Rural electrification in India: Galilee Basin coal versus decentralised renewable energy micro grids," Renewable Energy, Elsevier, vol. 89(C), pages 422-436.
    5. Nfah, E.M. & Ngundam, J.M., 2009. "Feasibility of pico-hydro and photovoltaic hybrid power systems for remote villages in Cameroon," Renewable Energy, Elsevier, vol. 34(6), pages 1445-1450.
    6. Thushara, De Silva M. & Hornberger, George M. & Baroud, Hiba, 2019. "Decision analysis to support the choice of a future power generation pathway for Sri Lanka," Applied Energy, Elsevier, vol. 240(C), pages 680-697.
    7. Thiam, Djiby-Racine, 2010. "Renewable decentralized in developing countries: Appraisal from microgrids project in Senegal," Renewable Energy, Elsevier, vol. 35(8), pages 1615-1623.
    8. Deichmann, Uwe & Meisner, Craig & Murray, Siobhan & Wheeler, David, 2011. "The economics of renewable energy expansion in rural Sub-Saharan Africa," Energy Policy, Elsevier, vol. 39(1), pages 215-227, January.
    9. Nock, Destenie & Levin, Todd & Baker, Erin, 2020. "Changing the policy paradigm: A benefit maximization approach to electricity planning in developing countries," Applied Energy, Elsevier, vol. 264(C).
    10. 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.
    11. 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.
    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. Rohani, Golbarg & Nour, Mutasim, 2014. "Techno-economical analysis of stand-alone hybrid renewable power system for Ras Musherib in United Arab Emirates," Energy, Elsevier, vol. 64(C), pages 828-841.
    14. Bhuiyan, M.M.H & Asgar, M.Ali & Mazumder, R.K & Hussain, M, 2000. "Economic evaluation of a stand-alone residential photovoltaic power system in Bangladesh," Renewable Energy, Elsevier, vol. 21(3), pages 403-410.
    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. Oliver, Matthew E. & Chapman, Oliver & Grijalva, Santiago & Matisoff, Daniel C. & Ramadhani, Maghfira & West, Amanda, 2026. "Managing zero-marginal-cost, intermittent renewable energy: A survey of the engineering, economic, and policy challenges," Renewable and Sustainable Energy Reviews, Elsevier, vol. 226(PC).
    2. Yang, Yuyan & Xu, Xiao & Luo, Yichen & Xu, Lixiong & Liu, Junyong & Hu, Weihao, 2024. "Human-safe and economic operation of renewable hydrogen-based microgrids under plateau conditions," Renewable Energy, Elsevier, vol. 231(C).
    3. Vladimir Kindra & Igor Maksimov & Olga Zlyvko & Andrey Rogalev & Nikolay Rogalev, 2024. "Thermodynamic Analysis and Comparison of Power Cycles for Small Modular Reactors," Energies, MDPI, vol. 17(7), pages 1-22, March.

    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. 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.
    2. 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.
    3. Trotter, Philipp A. & McManus, Marcelle C. & Maconachie, Roy, 2017. "Electricity planning and implementation in sub-Saharan Africa: A systematic review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 74(C), pages 1189-1209.
    4. Akbas, Beste & Kocaman, Ayse Selin & Nock, Destenie & Trotter, Philipp A., 2022. "Rural electrification: An overview of optimization methods," Renewable and Sustainable Energy Reviews, Elsevier, vol. 156(C).
    5. 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.
    6. 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.
    7. Yazıcı, Gözde & Ekin Karasan, Oya & Kocaman, Ayse Selin & Stoner, Rob, 2025. "Mathematical programming models for multistage rural electrification planning: Off-grid, grid and mini-grid options," Energy, Elsevier, vol. 316(C).
    8. Ortega-Arriaga, P. & Babacan, O. & Nelson, J. & Gambhir, A., 2021. "Grid versus off-grid electricity access options: A review on the economic and environmental impacts," Renewable and Sustainable Energy Reviews, Elsevier, vol. 143(C).
    9. Elias Hartvigsson & Erik Oscar Ahlgren & Sverker Molander, 2020. "Tackling complexity and problem formulation in rural electrification through conceptual modelling in system dynamics," Systems Research and Behavioral Science, Wiley Blackwell, vol. 37(1), pages 141-153, January.
    10. Islam, Aminul & Chan, Eng-Seng & Taufiq-Yap, Yun Hin & Mondal, Md. Alam Hossain & Moniruzzaman, M. & Mridha, Moniruzzaman, 2014. "Energy security in Bangladesh perspective—An assessment and implication," Renewable and Sustainable Energy Reviews, Elsevier, vol. 32(C), pages 154-171.
    11. Ugwoke, B. & Gershon, O. & Becchio, C. & Corgnati, S.P. & Leone, P., 2020. "A review of Nigerian energy access studies: The story told so far," Renewable and Sustainable Energy Reviews, Elsevier, vol. 120(C).
    12. Gabriela, PICIU, 2017. "Sustainability Renewable Energy Production," Contemporary Economy Journal, Constantin Brancoveanu University, vol. 2(1), pages 5-12.
    13. Muh, Erasmus & Tabet, Fouzi, 2019. "Comparative analysis of hybrid renewable energy systems for off-grid applications in Southern Cameroons," Renewable Energy, Elsevier, vol. 135(C), pages 41-54.
    14. Suberu, Mohammed Yekini & Mustafa, Mohd Wazir & Bashir, Nouruddeen & Muhamad, Nor Asiah & Mokhtar, Ahmad Safawi, 2013. "Power sector renewable energy integration for expanding access to electricity in sub-Saharan Africa," Renewable and Sustainable Energy Reviews, Elsevier, vol. 25(C), pages 630-642.
    15. 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.
    16. Ren, Weihang & Guan, Yongpei & Qiu, Feng & Levin, Todd & Heleno, Miguel, 2025. "Energy justice and equity: A Review of definitions, measures, and practice in policy, planning, and operations," Renewable and Sustainable Energy Reviews, Elsevier, vol. 222(C).
    17. Gabriela PICIU, 2018. "The Management Of Green Certificates In Romania," Contemporary Economy Journal, Constantin Brancoveanu University, vol. 3(1), pages 96-104.
    18. 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.
    19. Halder, P.K., 2016. "Potential and economic feasibility of solar home systems implementation in Bangladesh," Renewable and Sustainable Energy Reviews, Elsevier, vol. 65(C), pages 568-576.
    20. 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.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    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:16:y:2023:i:2:p:958-:d:1036031. 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.