Techno-economic viability of husk powered systems for rural electrification in Uganda: Part II: Economic and policy aspects

Abstract

Large proportions of households in developing countries, like Uganda, lack modern energy services especially electricity. Yet renewable biomass resources are often available. Economic and policy barriers are blamed for this scenario. In emerging economies such as India however, cost-effective, locally suitable and environmentally sustainable solutions have been developed and deployed. One such option is the Husk Power System (HPS) which utilizes agricultural residues as feedstock for electricity generation. To evaluate the economic viability of such a system in predominantly agricultural villages of Uganda, the economic figures such as levelized unit cost of electricity, Net Present Value, Benefit-Cost ratio, Payback Period and Internal Rate of Return were determined for a 34 kW plant utilizing either coffee or rice husks as fuel. The study showed a positive Net Present Value of 20,073US$ and 27,054US$, an attractive Payback Period of 4 and 3.75 years, and a 15 year Internal Rate of Return of 14 and 17% for HPS operating on either rice or coffee husks, respectively. The system was more economical than options like diesel generators and photovoltaics, though more expensive compared to grid power. The system was also more difficult to operate and sustain in villages connected to grid electricity. Policy implications of the findings support financial subsidies and rural-based support measures for adoption of the technology.