Technical and Economic Analysis of a Microgrid as a Solution for Electricity Supply in a Rural Distribution Network

Abstract

The rural town of Los Amores (province of Santa Fe) suffers from a poor electricity supply due to its location at the end of a long radial network, leading to high penalties for non-supplied energy. This paper presents a comparative techno-economic analysis to improve the service. A conventional solution, based on constructing a new power line, is evaluated against an innovative proposal of a microgrid with photovoltaic generation and battery storage. The methodology involves network modeling and simulation to verify the technical compliance of both alternatives. Results show that while both options solve voltage and reliability issues, the conventional project is economically unfeasible due to its high cost. In contrast, the microgrid not only eliminates penalties but is also profitable by reducing energy purchases and selling surplus, making it the recommended solution.