Unlocking the nexus potential: A techno-economic analysis of joint deployment of minigrids with smallholder irrigation

Abstract

Sub-Saharan Africa (SSA) has the lowest rate of electricity access and irrigation in the world, at 45% and 5% respectively. The problem is in part due to the low economic viability of rural electrification, particularly through grid extension, lack of low-cost irrigation energy, and limited access to finance for the high cost of irrigation infrastructure. Despite their promising potential, minigrids’ deployment has been rather slow in SSA, partly due to the lack of viable business models for the dispersed low-income rural population. In this paper, we present an integrated model that couples a minigrid model with a crop model to explore the nexus potential of joint deployment of minigrids with smallholder irrigation to alleviate barriers to both minigrid scale-up and irrigation adoption. We apply the proposed model to three rural case studies in different geographical contexts in SSA. Our simulation results show the potential of irrigation loads to lower the unit cost of minigrid energy (LCOE) by up to 47%, depending on the quantity of irrigable land and its spatial distribution. A further scenario-based sensitivity analysis of the minigrid with and without aggregate irrigation load shows wide variations in LCOE–between a minimum of $0.24/kWh and a maximum of $1.2/kWh–with changes in the cost of capital and technology cost. Regarding irrigation viability, our model results show that irrigation profitability is a function of a complex interplay of factors, including crop type, soil fertility, infrastructure costs, energy prices, fertiliser application rate, and crop farm gate prices. We further test the effects of pay-as-you-go (PAYGo) business model incentives on the profitability of irrigation with minigrids; our results show that various incentives that alleviate either all or a fraction of upfront capital cost do not only mitigate irrigation adoption barrier but also enhances its profitability on the part of the farmer. Finally, our model results underscore that the economic viability of joint deployment of minigrids with smallholder irrigation depends on the optimal combination of agro-ecological factors of production (location suitability), type of crop (on a descending order, onion, tomato, and potato are the most profitable crops in our model), fertiliser application rate (near-optimal to optimal soil fertility is recommended) and cost scenarios (low cost of capital and technology preferred). In the main, our model and the results thereof highlight the potential benefits of co-planning minigrids and irrigation projects. Our model and results presented in this paper can be used as high-level decision-making pointers on the nexus planning of minigrids with smallholder irrigation farming.