Smart Microgrids as a Solution for Rural Electrification: Ensuring Long-Term Sustainability Through Cadastre and Business Models

Abstract

The provision of energy at the local level by using renewable and local resources is increasingly acknowledged as a techno-economic solution for rural electrification. This work describes an approach for implementing microgrid projects at the institutional level by means of a specific entity that uses methods that engage the community in microgrid operation and maintenance (O&M), which ensures long-run benefits. The first step, related to macro-level barriers, is addressed by building a complete cadastre of isolated communities, while the second, at the micro level, focuses on business models for covering investment and O&M costs. A cadastre uncovers the key characteristics of each location (energy resources, availability, socio-economic conditions, environment, etc.). A cadastre also helps identify local needs, develop monitoring strategies, and determine benchmarks among microgrids. Its information also assists with proposing new projects, securing funding, and monitoring actual microgrids. At the micro level, local stakeholders, economic capabilities, social capital, and organizational structures are identified, which contribute to the selection of a tailored business model that can enable fundraising and O&M activities. The approach is presented in a four-stage framework: 1) background data collection; 2) community profile building; 3) system design; and 4) detailed engineering. Each community is evaluated by a prioritization index that considers the electrical conditions of each residence.