Feasibility of rural electrification and connectivity—A methodology and case study
Henock Dibaba, Iurii Demidov, Evgenia Vanadzina, Samuli Honkapuro, Antti Pinomaa
Abstract
Despite the recent development, electrification of rural sub-Saharan Africa remains a major challenge because of remote locations and the low income of the population in those areas. There is a clear need for novel approaches for addressing this challenge. This paper proposes a new method for analysing the feasibility of microgrid projects based on consumers’ expressed willingness to pay for the service in rural sub-Saharan Africa and microgrid project developers’ willingness to accept. The paper also introduces a common measurement parameter, unit of service, that combines electricity and telecommunications in one service package to establish a link between customers’ preferred price and profitability for the service provider. Further, the proposed methodology is used to analyse a study case located in rural Namibia. The results suggest that there is a price range for the service where a microgrid project can be feasible while satisfying local consumers’ willingness to pay for the service. By using the proposed methodology, microgrid developers can adequately justify their investment plan and minimize the risks of non-payments.