Decentralised off-grid electricity generation in developing countries: Business models for off-grid electricity supply

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As 80% of about 1.6 billion people who lacked access to electricity in the world in 2005 reside in South Asia and sub-Saharan Africa, and given the importance of energy in achieving the Millennium Development Goals (MDG) of the countries and thereby general welfare of the population, this proposal aims at developing innovative solutions to the problem through an interdisciplinary research involving UK and South Asian (Indian) universities, NGOs, government agencies, financing institutions, and other stakeholders. We propose to take a systematic view of the problem by considering the local resource availability, appropriate technology choices, institutional arrangements, and financing options and to demonstrate cost-effective and viable options through a demonstration project in a selected area of South Asia. We would also analyse the scaling-up and mainstreaming of the off-grid business delivery models and recommend enabling conditions for a wider implementation of such solutions. This research proposal is based on the premise that the solution strategy has to promote innovative solutions as opposed to prescribing standard templates for adoption and that each rural area will have to search for its own solutions a) By focusing on the creation of opportunities for higher income generation in monetary terms. Unless money flow increases to the poor, commercial energies stand little chance of competing with traditional energies. b) by developing local energy markets taking into account the specificities of local energy situation resources, needs, capacities, strengths and constraints and adopting appropriate supply mechanisms and organizational structures to cater to the local needs. c) by selective and judicious use of market interventions to make energy supply affordable but ensuring financial viability of energy supply. Unless the supply is financially viable, it cannot be sustained. d) by ensuring local community participation in the decision-making and policy implementation process.Deriving from the above premise, this research will focus on hybrid, multi-functional technological platforms using innovative participatory delivery mechanisms (such as franchisees, licensees, co-operatives or other local enterprise models) and alternative funding options (e.g. micro-finance, capital grants, subsidies, fee-based systems). Two main research questions are as follows:(1) Are there cost-effective, secure and reliable local off-grid electricity supply solutions that can meet the present and future needs and are socially acceptable, institutionally viable and environmentally desirable?(2) Do these local solutions have the scaling-up and replication potentials and can these solutions be brought to the mainstream for wider electricity access in the developing world?We are proposing an inter-disciplinary work programme spanning over a period of five years that will be conducted by a Consortium led by the University of Dundee. The work is organised around two main themes (Theme 1: local level solutions, Theme 2: Replicable generic models) and each theme revolves around two work packages (WP) as described below, with a total of 5 packages. At each work package level, we shall pay specific attention to capacity building, cross-referencing and cross-learning, dissemination of the research outcomes and policy translation of academic research. These four cross-cutting elements run across the entire programme.We are specifically focusing on South Asia where the largest concentration of people without energy access can be found. The diversity of local conditions found in the South Asian region provides a rich comparative base for analysing decentralised off-grid electricity supply provisions. The consortium partners have excellent research and project track records in this area and our serious inter-disciplinary research programme aims to provide lasting solutions to the energy and development problems.