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The Economics of Renewable Energy Expansion in Rural Sub-Saharan Africa

Time: Tuesday, March 9, 12.30-2 pm

Location: MC3-101

Policy Research Working Paper 5193 (January 2010)


Uwe Deichmann, Development Research Group, World Bank
Craig Meisner, Eastern Europe and Central Asia Department, World Bank
David Wheeler, Center for Global Development, Washington, D.C.

Accelerating development in Sub-Saharan Africa will require massive expansion of access to electricity -- currently reaching only about one-third of households. This paper explores how essential economic development might be reconciled with the need to keep carbon emissions in check. The authors develop a geographically explicit framework and use spatial modeling and cost estimates from recent engineering studies to determine where stand-alone renewable energy generation is a cost effective alternative to centralized grid supply. The results suggest that decentralized renewable energy will likely play an important role in expanding rural energy access. But it will be the lowest cost option for a minority of households in Africa, even when likely cost reductions over the next 20 years are considered. Decentralized renewables are competitive mostly in remote and rural areas, while grid connected supply dominates denser areas where the majority of households reside. These findings underscore the need to de-carbonize the fuel mix for centralized power generation as it expands in Africa.

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