The role of Decentralized Distributed Generation in achieving universal rural electrification in South Asia by 2030

This study is motivated by the goal of achieving ‘Universal Energy Access’ by 2030 and looks at electricity access for rural households in the South Asian region. The ‘MESSAGE-Access’ model is employed to assess the cost effectiveness of centralized and Decentralized Distributed Generation (DDG) technologies. Delivery mechanisms are modelled to include mini-grid and stand-alone systems and the analysis includes an estimation of rural household electricity demand from lighting and appliances. We assume two future demand scenarios with a ‘minimum threshold’ and a ‘higher threshold’ of electricity consumption of 65 and 420kWh per household per year, respectively. We find that the cost of delivering electricity by centralized generation and grid distribution is up to four times the cost of stand-alone and mini-grid DDG options in the case of ‘minimum threshold’ demand scenario. These results are robust to alternate assumptions regarding costs of technologies. We also estimate that public subsidy bill for kerosene can be substantially reduced if all households switch to electricity as their primary source of lighting. Thus, promoting DDG options can reduce capital investments needed to meet access goals significantly and have an important role to play, in meeting the goal of universal electrification by 2030.