Econonomics of Energy and Environmental Policy

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Sustainable and Socially Resilient Minigrid Franchise Model for an Urban Informal Settlement in Kenya

Abstract:
Kibera is a large informal settlement, in Nairobi, Kenya where electricity access is presently expensive, intermittent, and dirty. The context of Kibera also speaks to larger global dynamics of rapid urbanization, the creation of an urban poor, the transitory experience of informal settlements, and the role of non-governmental actors; each of which provides challenges to traditional sustainable urban planning. This research explores the opportunity for environmentally sustainable and socially resilient development in Kibera through a mixture of simulation and field-based assessment of a hybrid minigrid for a community empowerment facility—the Kibera Town Centre (KTC). Following the installation of one of the area's first grid-tied solar-battery systems in 2018 and a national policy change in 2019, the future operation and potential expansion of KTC's energy system affords an opportunity to examine the feasibility of a 'franchise minigrid' model to power community loads including schools and small businesses. Using the HOMER Pro minigrid simulation tool, we find that the levelized cost of energy will decrease by 60% with optimal minigrid expansion, thereby achieving costs less expensive than the prevailing utility rates. We then propose a novel, community-empowering, and profitable 'minigrid franchise' business model that can provide supplemental income and employment to neighboring businesses and homes. This research uniquely combines primary data, simulation, policy opportunity analysis, and business models in collaboration with the community to contribute to literature enabling electricity access for informal settlements and informing the context of sustainable and resilient development for the urban poor.
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Keywords: Sustainable cities, renewable energy, electricity access, informal settlements, equitable employment, community minigrids, sustainable development

DOI: 10.5547/2160-5890.11.1.spat


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Published in Volume 11, Number 1 of The Quarterly Journal of the IAEE's Energy Economics Education Foundation.


 

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