Grid versus off-grid electricity access options: A review on the economic and environmental impacts

Abstract

This research reviews the economic and environmental impacts of grid-extension and off-grid systems, to inform the appropriate electrification strategy for the current population without electricity access. The principal technologies reviewed are centralised conventional fossil-fuel grid-extension and off-grid systems mainly based on solar PV and batteries. It finds that relatively few studies explicitly compare grid-extension electricity costs against off-grid systems costs and that there is a lack of consistency in the methodologies used to determine the least-cost solution. Nevertheless, the studies reviewed show a range of around $0.2–1.4/kWh for off-grid electricity access, compared to a range of below $0.1/kWh to more than $8/kWh for grid access, pointing to a number of cases in which off-grid access may already be the more cost-effective option. Existing literature on the environmental impacts primarily focuses on greenhouse gas emissions from electricity generation, with off-grid (solar PV and storage) systems’ emissions in the range of 50–130 gCO2-eq/kWh and grid generation from close to 0 gCO2-eq/kWh (for renewables and nuclear sources) to over 1,000 gCO2-eq/kWh (for coal). Emissions impacts stemming from transmission and distribution grids suggest a range of 0–30 gCO2-eq/kWh. Assessments of other environmental impacts such as water use, land use, biodiversity and e-waste are often absent in studies, whilst few studies explicitly compare the environmental impacts of grid versus off-grid systems. Further research should focus on comparing the costs of electricity access options using consistent metrics, expanding the scope of environmental impacts analysis, and integrating environmental and economic impacts into a comprehensive sustainability assessment of different options.