Renewable electricity generation target setting in developing countries: Modeling, policy, and analysis

Abstract

Many countries have set renewable energy targets in their electricity supply mix to encourage investments in re newable energy technologies. In developing countries, however, many of such targets are either abandoned or fall far short of the target date, primarily due to issues of financing, cost of electricity, and level of unmet demand. This paper presents a Generation Expansion Planning model that can be used to assess such issues when setting a renewable electricity generation target. In particular, the model can be used by developing countries to set re newable electricity generation targets that are in line with their financial ability and thus, stand a higher chance of being achieved. Additionally, the analysis offered can inform developing countries of the cost and benefits of a renewable electricity generation target policy. The usefulness of the model is demonstrated using Ghana as a case. The results indicate that Ghana will need a budget of not less than 1% of its GDP for generation capacity in vestment if it desires to achieve its 10% renewable electricity generation target by 2030 while keeping unmet de mand at reasonable levels. If Ghana however enforces the target at its current capacity investment levels, it risks raising unmet demand levels by an average of 4% per year and cost of electricity provision by about US$224 mil lion annually between 2019 and 2030 when compared to the absence of a renewable electricity generation target.