The economics of off-grid: an analysis of subsidy graduation policy for missionary electrification
Date
2016-06
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Abstract
This study determines the overall welfare and distributional implications of the
Missionary Electrification Subsidy Graduation Program by studying three policy options,
namely: Continued subsidy, Graduation through full private sector investment in
renewables and Graduation through main grid connection. The Annualized Life Cycle
Cost method was used to simulate these three options in a case study of the Missionary
Electrification of the Romblon Electric Cooperative (ROMELCO). Findings of the study
include the incentive for the area to stay under the subsidy or pursue graduation through
full private investment in renewable energy and the disincentive to pursue graduation via
main grid connection. The study recommends policy adjustments to improve efficiency
and equity considerations of both Continued subsidy and Graduation policies for a more
sustainable Missionary Electrification program and a smoother transition into the Subsidy
Graduation Program.
Description
Keywords
Electrification, Off-Grid, Subsidy Graduation, Main Grid Connection, Renewable Energy, NPC-SPUG, ROMELCO.