Assessment of Decentralized Hybrid Mini-grids in Sub-Saharan Africa: Market Analysis, Least-Cost Modelling, and Job Creation Analysis

Abstract

With a growing impetus to meet energy demand through decentralized hybrid mini-grids in rural and semi-urban locations in Sub-Saharan Africa (SSA), the need to accurately assess the market drivers, policy requirements and job creation impacts of this energy system typology within this region cannot be ignored. This work provides a techno-economic impact analysis of decentralized hybrid energy systems in selected locations in SSA. To optimally satisfy an electricity demand time-series for a year and minimize all cost components amortized over a period of 20 years, a least-cost modelling approach and tool is applied. An Employment Factor approach was used to calculate the direct employment impacts across the value chain of different hybrid mini-grid types. Additionally, the Leontief Inverse Input-Output model is used to determine the backward linkage economy-wide-jobs (gross jobs) created. The preliminary results show that the "Solar + Wind + Diesel + Battery" hybrid system (SWDB) has the lowest Levelized Cost of Electricity (LCOE), thus it provides the cheapest means of meeting the electricity demand in the modelled regions. However, the highest locally created direct and net employment impact in the model locations is provided by the "Wind + Battery" (WB) system. Two major sectors, manufacturing and agriculture have the largest number of gross jobs in the local economy for all decentralized hybrid systems analysed. This occurs due to higher linkages between these two sectors and the productive energy use in the area. Conversely, despite higher employment impacts obtained for WB, the cost and duration needed for A. Okunlola (21 wind resource mapping and assessment serve as a major bottleneck to WB systems market access in the regions. The results of the sensitivity analysis suggest that by de-risking economic factors, such as discount rates, market access for decentralized renewable energy mini-grids can be improved in SSA.

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