Decentralized renewable hybrid mini-grid based electrification of rural and remote off-grid areas of Bangladesh

Like many other developing nations Bangladesh has a very poor electrification rate especially in the rural areas. Millions of people here are excluded from the benefit of globalization because of no access to necessary electricity supply. This research work proposes decentralized renewable hybrid mini-grids as a potential approach for off-grid rural and remote area electrification in Bangladesh. Based on the available renewable resources an area specific resource map has been developed. The characteristics of the bottom of the economic pyramid market including customers’ attitude to switch from liquid fuel to mini-grid based electricity supply, expected load demand and their willingness to pay have been explored through a field study. Different combinations of hybrid systems have been designed and optimized using the HOMER micro-grid design software to cover the whole country. Results suggest that serving the required load over wider hours rather than having the same load concentrated in a short span of time can achieve better hybrid system performance. Initial capital subsidy of 40 percent along with 5 percent interest on loan has been applied in accordance with the renewable energy policy of Bangladesh government. Proposed optimized rice husk-diesel hybrid system in Rangpur, micro hydro-PV system in Rangamati, wind-PV system in Chakaria and PV-diesel system in coastal areas can produce electricity for USD 0.172/kWh, 0.291/kWh, 0.217/kWh and 0.316/kWh respectively while serving loads for 12 to 18 hours a day. Field data analysed by applying the dichotomous choice contingent valuation method revealed that customers are willing to pay maximum of USD 0.43/kWh. The value difference between the cost of electricity generation and the customers’ willingness to pay creates the opportunity to attract the private investors. Suitable business delivery models have been identified and explained for successful mini-grid business by private investment. Optimum hybrid systems have been standardized for replication and a sustainable business model has been suggested for scaling up this electrification approach.