Kashi - Off Grid

1. LIMESTONE ANALYTICS
Benefit-Cost Analysis of Interventions in
Haiti’s Electricity Sector:
Isolated Grids
Authors:
Jay Mackinnon (lead), Bahman Kashi, Nicolas Allien, Juan A. B. Belt
Haiti Priorise: May 2nd, 2017
Organized by the Copenhagen Consensus Centre

2. Electricity in Haiti
• Per capita consumption of electricity in Haiti is significantly lower than other
Caribbean countries, and is only two percent of the neighboring Dominican
Republic (World Bank, 2015, p.5).
• The national average electrification rate in Haiti is 35%. The rural
electrification rate is only 11% (World Bank, 2015).
• Those Haitians that do have access to electricity through grids face
shortages, and it is estimated that those with connections only have
electricity for 5-9 hours a day (Worldwatch Institute, 2014, p.26).
• The lack of reliable electricity supply is cited by business owners as the most
binding constraint to private sector development (World Bank, 2015, p.5).
2

3. Per-capita Consumption of Electricity (kWh)
3

4. Isolated Grids
An isolated grid is an electricity grid that
is separate from the larger main grids.
Electricity is generated and consumed
within the grid.
Haiti does not have one central grid, but
rather, many grids of various sizes.
4

5. Why Isolated Grids?
1. Transmission of electricity can be quite costly, and these costs increase as
the distance transmitted increases.
2. Haiti's existing infrastructure is struggling to deliver electricity to Haitians
already connected to the main grids. Extending existing grids might therefore
put additional strain on infrastructure, and might not produce a reliable supply
of electricity to Haitians living in remote areas.
5

6. Summary Results (4 Technologies, 2 Grid Sizes)
6
Haiti BCR World BCR
Small Grid Large Grid Small Grid Large Grid
1. Diesel 1.39 3.58 1.40 3.58
2. Diesel and Solar 1.12 3.14 1.13 3.43
3. Diesel, Solar and Battery 1.16 2.69 1.18 2.94
4. Hydro 1.39 6.98 1.41 7.65
Discounting @ 12%, 353.97 HTG/Tonne SCC

7. What are the costs and benefits we considered?
7
Stakeholders
Globe
Haiti All
Countries
Total
Partnership Customers Total
Benefits
Reduced Cost of Electricity for Consumers X X X
Reduced Carbon Emissions X X
Revenue from Sale of Electricity X X X
Costs
Capital Expenditure X X X
Operating Costs X X X
Increased Carbon Emissions X X

8. Benefit - Improved Electricity Supply
1. Electricity delivered to consumers - The difference between predicted
coping costs and cost of electricity under each scenario, multiplied by the
energy consumed for each customer.
We considered different coping costs for different consumer segments. For
example, we assumed that large businesses could use diesel generators, and
therefore have a much lower coping cost than small households that are reliant on
kerosene for lighting.
8

9. Estimating Coping Costs
For small consumers: Value of kerosene needed to generate the equivalent
amount of light.
For larger consumers: Cost of running a small diesel generator occasionally to
generate electricity.
Some potential issues here, due to data limitations.
9

10. Consumer Classes
10
Consumer Class
Coping Cost
per kWh
equivalent
(HTG)
Amount of
Energy
Consumed in
Small Grid
(kWh/ Year)
Quantity of
Electricity
Consumed in
Large Grid
(kWh/Year)
Consumers in
each Class
Small Grid, %
of Total (435)
Consumers in
each Class in
Large Grid, % of
Total (44,250)
Small Household
(Light Only)
661.84 9.88 324.43 67% 14%
Larger Household 34.70 38.46 324.43 16% 79%
Small Business 34.70 804.22 1,460.62 16% 6%
Large Business 32.27 8,344.00 17,645.91 1% 1%
Public
Establishments
32.27 - 9,745.09 0% 1%

11. Benefit - Reduced CO2 Emissions
2. Reduced carbon emissions - The difference between the emissions of coping
technologies per kWh consumed before the project and the per kWh emissions of
the newly installed grid, multiplied by the amount of electricity consumed by each
consumer.
For example: The difference in emissions from kerosene and diesel, multiplied by
the energy consumed by small households.
11

12. Other Potential Benefits
Education
We didn’t include educational benefits:
1. Because the value of consumption is already included in the analysis.
2. Because we found a lack of consistent evidence about the effects of rural electrification on education. Squires, T.
(2015) indicated that rural electrification led to a decrease in attendance for students in honduras. Aguirre, J. (2014)
found that study time increased after electrification in Peru.
Health
We struggled to find useful evidence about the health impacts of eliminating kerosene usage in households. World Bank.
(2008) claimed that switching away from kerosene could yield a health benefit equal to $2.50 USD/ household. We chose to
omit this because it was not substantial and their calculation was not included in the paper.
12

13. Costs
1. Capital Costs
a. Generation Technology (per kW)
b. Distribution (per Connection)
1. Operating Costs
a. Fixed
b. Variable (per kWh)
13

14. Capital Costs of Generation
14
Technology Small Scale Capital
Cost per kW/kWh
Larger Scale Capital
Cost per kW/kWh
Lifespan (Years)
Solar Panels 30,772.73 30,305.00 10
Diesel Generator 148,917.73 150,347.00 20
Battery 115,150.73 113,878.00 12.5
Hydro 337,675.00 202,604.00 25

15. Operating Costs of Generation
15
Technologies Fixed O&M per kW
(2017 HTG)
Variable O&M per kW
(2017 HTG)
Diesel Generator 5,627.72 0.67
Diesel and Solar 5,627.72 0.4
Diesel, Solar and Batteries 7,320.22 0.25
Hydro 3,039.10 0

16. Data Limitations
We were limited by our access to consumer demand data. We were able to
obtainsome limited data from 2 grids, one small isolated grid (Les Anglais) and
one large grid (Les Cayes)
Our data only had the # of consumers and the total consumption. Benefits would
be estimated more accurately if we had more data on consumer behaviour in
Haiti.
In other words, the uncertainty about elasticities severely limits our analysis.
16

17. Conclusions
• Isolated Grids can potentially help with rural electrification.
• Hydro is probably ideal, but diesel generators or solar-diesel blends could
generate benefits as well.
• Each grid will be different, and our analysis will not be applicable to all grids
• More data would be a great asset
• As technologies develop, the economics of isolated grids will change as well
17

18. Appendix
18

19. Extension: Transmitting Electricity
Assume 10km of 12.47kV transmission lines @ 50,000 USD/km
Use estimates of electricity costs per kWh from grid scale generation models
19
Benefit-Cost Ratio (Economic)
Technology 3% Discount Rate 5% Discount Rate 12% Discount Rate
Wind Turbines 1.92 1.52 0.88
Conventional Combustion 2.47 1.97 1.11
Conventional Combined Cycle 2.59 2.05 1.14

20. Sensitivity - Cost Overrun
20
Cost Overrun
Technology Mix 5% 10% 25%
Diesel Only 1.38 1.35 1.29
Diesel and Solar 1.06 1.04 0.97
Diesel, Solar and Battery 1.13 1.09 0.98
Hydro 1.35 1.30 1.15

21. Sensitivity - Discount Rate
21
Small Grid BCR Large Grid BCR
Discount Rate: 3% 5% 12% 3% 5% 12%
Diesel 1.55 1.40 1.07 3.76 3.58 3.00
Diesel and Solar 1.28 1.13 0.80 4.76 3.43 2.42
Diesel, Solar and Battery 1.41 1.18 0.76 4.13 2.94 2.02
Small Hydro 1.83 1.41 0.78 12.17 7.65 3.95

22. Acknowledgements
We would like to extend our gratitude to Rachel McManus and Allison
Archambault from Earthspark for sharing details of their experience with the Les
Anglais microgrid, as well as sharing data about consumption in the grid.
All errors in the model and paper are the responsibility of the authors.
We are aware of many limitations with the model.
22