Sizing solar-based mini-grids for growing electricity demand: insights from rural India

Mini-grids are a critical way to meet electricity access goals according to current and projected electricity demand of communities and so appropriately sizing them is essential to ensure their financial viability. However, estimation of demand for communities awaiting electricity access is uncertain and growth in demand along with the associated cost implications is rarely considered during estimation of mini-grid sizing. Using a case study of two rural communities in India, we assess the implications of demand growth on financial costs and performance of a mini-grid system consisting of solar photovoltaic (PV) panels and battery storage using two different system sizing approaches. We show a cost-saving potential of up to 12% when mini-grids are sized using a multi-stage approach where mini-grids gradually expand in several stages, rather than a single-stage optimisation approach. We perform a sensitivity analysis of the cost of the two sizing approaches by varying six key parameters: demand growth rate, logistics cost, system re-sizing frequency, likelihood of blackouts, solar PV and battery cost, and degradation rate. Of these, we find that system costs are most sensitive to variations in demand growth rates and cost decreases in solar PV and batteries. Our study shows that demand growth scenarios and choice of mini-grid sizing approaches have important financial and operational implications for the design of systems for rural electrification.