A method for the appraisal of alternative electricity supply options applied to the rural areas of Misiones Province, Argentina

Abstract

This paper reports on a major research effort to develop a method to analyze the electricity needs of poor rural people and to determine the least-cost option for meeting these needs. The method has two particular features: first, it allows consideration of the full range of “conventional and nonconventional” technical options that are possible given the actual natural resource endowment of the region and its technological capabilities. Second, it provides practical methods for determining the electricity requirements of a range of end uses for a number of different income groups in specific geographical locations. The method not only makes it possible to identify the least-cost option for each geographical location, but it also provides a wide range of economic information (including the macroeconomic effects) which is often required by policy makers. In particular, it allows quantitative estimates to be made of the impacts of electricity investment on a number of other key variables such as employment, the development of local industrial sectors, and the use of foreign exchange. The method is applied to the specific case of the electricity needs of the rural population of Oberá and Cainguás departments in the province of Misiones, Argentina. The complete set of results is reported elsewhere (IDEE, 1988). The purpose of this article is to summarize the method developed and the results obtained in Misiones.