DEVELOPMENT OF INVESTMENT-BASED DECISION SUPPORT SYSTEMS (IBDSS) FOR INTERCONNECTED MINI-GRID DEPLOYMENT

Abstract

he deployment of an interconnected mini-grid (IMG) in developing countries is moving from grant-based to commercial, thus creating demands for Investment-Based Decision Support Systems (IBDSS). However, information on the Investment-Based Site Selection (IBSS) models for mini-grid to drive an IBDSS is sparse. This study aimed to develop a framework for operationalizing a decision support system in the deployment process of interconnected mini-grids. The IBDSS problem was studied within the context of multi-criteria decision-making. Customer Lifetime Value (CLV) and Site Characteristics (SC) were used as criteria for characterizing potential Investment Sites (IS). Revenue and Cost of generating revenue (C) were the two sub-criteria embedded in the CLV while Energy Demand (ED), Customer Classification (CC), Average Technical Commercial and Collection (ATCC) losses, and Commercial Potential (CP) were embedded in the SC. A Site Suitability (SS) function was derived from weighted CLV and normalized-weighted SC. The IBDSS model was subsequently developed using normalized scores of SS function and the Net Present Value with Weighted Average Cost of Capital (NPV-WACC) as inputs. The investment-based decision support system that was developed is suitable for site selection and data-driven investment decision-making for mini-grid projects.