Combining storage and generation for prepaid electricity service

Micro-grids offer the promise of supplying electricity to rural communities in many developing countries where transmission infrastructure investments are prohibitively expensive. Many of these communities currently use diesel generation to meet their basic lighting and refrigeration needs. Small diesel generators have notorious part load inefficiency - they suffer 10-20% efficiency losses when operated below their sweet spot. Combining diesel generators with storage allows micro-grids to operate economically by ensuring that the generator is either off, or operating near its sweet spot. The resulting fuel savings can be compelling, particularly in countries where fossil fuel is imported. The optimal operating policies for diesel generation and storage are explored. Heuristics that modify these policies to account for storage loss are studied through simulations. Investing in the capital costs of storage is an impediment to broad deployment. The use of prepaid tariff systems to release capital from accounts receivable for financing these costs is discussed. The target implementation in rural communities of Palawan Island in the Philippines is described.