Ex-post design, operations and financial cost-benefit analysis of mini-grids in Ghana: What can we learn?
Dramani Bukari, David A. Quansah, Francis Kemausuor, Muyiwa S. Adaramola
Abstract
This paper adopted an integrated scenario modelling approach using HOMER and financial cost-benefit analysis to investigate design accuracy, power supply challenges and financial viability of two existing mini-grids in Ghana. It also examined the economic competitiveness of grid extension relative to the mini-grid plants, and offered learnings for future improvement with broader application to other developing countries. Results of the techno-economic analysis points to over-dimensioned mini-grids which should ideally be able to supply power reliably without any issues. However, altered operating decisions led to capacity constraints which is made worse by degraded batteries. Two reasons were identified to account for the oversized plants: initial load over-estimation and the influence of grant. Cost of electricity supply was found to be considerably higher than the applied tariffs making it impossible for the recovery of even operations and maintenance cost at current levels of consumption. The analysis also show that efficiently designed tariffs, coupled with the application of existing tariff regulations can significantly improve financial performance to guarantee sustainability of the mini-grid plants. The mini-grids were observed to be cost-ineffective compared to grid extension mainly due to unsuitable siting distances. Beyond efficient tariff design, other learnings from the investigation included; (1) the need to couple in-depth surveys with modular mini-grids construction to avoid over-design, (2) the need to use diesel support to mitigate cost in systems aiming for high reliability, (3) that grants can have an expansionary effect on system dimensioning and needs to be monitored, (4) that cost-cutting measures must be an integral part of mini-grid development programmes to narrow viability gap, and that, (5) overcapacity can lead to altered operating plans with consequences.