The Viability of Providing 24-Hour Electricity Access to Off-Grid Island Communities in the Philippines

Abstract

Techno-economic viability assessments of rural electrification projects, especially those that integrate renewable energy technologies, typically look at system design optimization that would yield the most favorable cost and investment scenarios. However, the true viability of these projects relies more importantly on their impact to the rural communities while ensuring positive financial returns to the project developers. This paper aims to expand the viability assessment of electrification projects in off-grid island communities in order to mainly address the apparently opposing needs of the major stakeholders at play by developing a viability assessment framework considering the techno-economic dimensions as well as the socio-economic impacts to the consumers. The analysis follows a two-phase approach, where system design optimization and financial impact calculations are done in the first phase and the socio-economic viability is accomplished in the second phase. Results suggest that high capital investment for renewable energy has a better pay-off when there is higher demand for electricity. On the other hand, consumers also tend to receive higher economic benefit as they consume more electricity. However, the low income of rural consumers strains their capacity to pay, which necessitates their engagement in more economically-productive uses of electricity. The viability assessment framework can be a useful tool for both investors and consumers as this provides important insights which can be translated into impactful interventions that may include government support through improved policy implementation that can positively sustain electricity access in off-grid communities through renewable energy.