High hopes are pinned to mini-grids for rural electrification, especially in remote and sparsely populated areas. This note presents new evidence from a large evaluation of a US Millennium Challenge Corporation investment into mini-grids in Indonesia. We find that, a few years after commissioning, many mini-grids in the program do not operate properly, corroborating older concerns about the sustainability of mini-grids that have been voiced for several years. Operational costs are typically high and electricity demand low. Our findings are not novel; they rather resonate with a growing literature on the high-cost-low-demand dilemma in mini-grid electrification projects. Therefore, mini-grid programs should take these structural challenges into account, and especially abstain from overly optimistic electricity demand projections.
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Duthie et al. (2024) studied this question.
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