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An Economic Evaluation of Small-scale Distributed Electricity Generation Technologies


  • Chris Hansen

    (Oxford Institute for Energy Studies & Dept. of Geography, Oxford University)

  • John Bower

    (Oxford Institute for Energy Studies)


Numerous renewable and small-scale distributed generation (DG) technologies have now progressed to the stage where their technical feasibility has been proven and full-sclae projects have been successfully implemented worldwide. This paper surveys the available DG technologies and models their economic performance in rural areas of India with particular emphasis on comparing the costs of hybrid DG systems with conventional grid connectionsfor remote rural village-level applications. Modelling inputs are based on demand, fuel, availability, costs and local operating conditions found in the Kachchh District of Gujarat, India. Results demonstrate that hybrid power systems can economically provide electricity in rural areas if local energy resources are adequate. Additional environmental and economic benefits of hybrid DG are also quantified for the case study area and reveal a 40% reduction in diesel fuel use compared to diesel genset only systems.

Suggested Citation

  • Chris Hansen & John Bower, 2004. "An Economic Evaluation of Small-scale Distributed Electricity Generation Technologies," Others 0401001, University Library of Munich, Germany.
  • Handle: RePEc:wpa:wuwpot:0401001
    Note: Type of Document - pdf; prepared on winXP; pages: 59; figures: 23

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    References listed on IDEAS

    1. Yang, Ming, 2003. "China's rural electrification and poverty reduction," Energy Policy, Elsevier, vol. 31(3), pages 283-295, February.
    2. Das, T.K. & Banerjee, S., 1995. "Energy technology choice in rural India," Energy, Elsevier, vol. 20(7), pages 683-685.
    3. Ackermann, Thomas & Söder, Lennart, 2002. "An overview of wind energy-status 2002," Renewable and Sustainable Energy Reviews, Elsevier, vol. 6(1-2), pages 67-127.
    4. Tongia, Rahul & Banerjee, Rangan, 1998. "Price of power in India," Energy Policy, Elsevier, vol. 26(7), pages 557-575, June.
    5. Jose Antonio Carta and Jaime Gonzalez, 2001. "Self-Sufficient Energy Supply for Isolated Communities: Wind-Diesel Systems in the Canary Islands," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 115-146.
    6. Rajsekhar, B. & Van Hulle, F. & Jansen, J. C., 1999. "Indian wind energy programme: performance and future directions," Energy Policy, Elsevier, vol. 27(11), pages 669-678, October.
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    More about this item


    Distributed generation; hybrid power; renewables;

    JEL classification:

    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • O22 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Project Analysis

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