Prosumer Empowerment through Community Power Purchase Agreements: A Market Design for Swarm Grids

To achieve the United Nation's Sustainable Development Goal 7 “Clean and Affordable Energy”, the most economically viable option for servicing the part of the population that is too remote or for which the national grid extension is too expensive are distributed renewable energy solutions (DREs), that is, standalone solar home systems (SHSs), mini grids, and swarm gridsi. By 2030, more than 290 million people could be connected to mini grids. Following a top-down approach to electricity access, countries of the Global South, with support of international aid and development funding, are accelerating their national grid expansion. As the national grid reaches their customers, the private sector (DRE companies) is put at danger of having to either relocate their assets or abandon them. At the same time, the DRE end-user, reached by the national grid, faces several challenges due to being exposed to a double infrastructure. These challenges can be of technical and financial nature and are caused by the assets becoming abundant or needing additional equipment to be suitable for national grid and DREs. In our new paper we investigate a technically and economically viable solution for the co-existence of the national grid−a centralized infrastructure−with mostly decentralized, renewable energy infrastructure in Global South countries. At the intersection of these two electrification pathways the question arises if the two approaches can be integrated to the benefit of society by maintaining existing assets. We assume the technical link to be a bidirectional inverter and a battery representing the point of common coupling (PCC) between national grid and currently off-grid systems. We then suggest to apply a cost recovery approach to calculate the economic value of a community power purchase agreement (C-PPA) that allows the community to enter into a trade agreement with the national grid to export at a specified rate.