Planning for Growth¶

Scenarios 4–5 · demand grows +5 %/year · off-grid · lithium-ion

Real communities rarely stand still. After electrification, demand typically grows as households acquire appliances and new businesses and productive uses appear. These two scenarios ask how the least-cost system should respond — first by sizing for growth, then by staging the investment over time.

Scenario 4 — Demand growth¶

We keep the lithium-ion off-grid system from Scenario 2 but let electricity demand increase by 5 % per year over the 10-year horizon. Because the demand trajectory now changes, this becomes the new reference case for the growth analysis.

As expected, the model installs more of everything to meet the rising load — and diesel in particular grows more sharply, because it guarantees reliability during the hours when solar alone cannot keep up with a larger demand.

Compared with the constant-demand case, the system shows a lower renewable share and higher fuel use — growing demand puts more pressure on backup generation.

With demand growing every year, annual variable costs rise progressively — the system serves a larger load and leans more on backup generation in later years. This is the challenge of long-term planning: a system designed only for today's demand can become insufficient, or increasingly expensive to operate, as the community grows.

Scenario 5 — Capacity expansion¶

We keep the same 5 %/year growth but enable capacity expansion: instead of installing the whole system upfront, MicroGridsPy can invest in two stages (two 5-year steps). The first investment meets the initial demand; additional capacity is commissioned later, as needs increase.

Installed capacity grows in two steps: an initial 2026 investment, then an increment in 2031. Installed capacity is non-decreasing across the horizon (see the multi-year methodology).

With the freedom to phase investment, the model chooses a different, more renewable strategy than the single-shot case:

Final PV and battery capacities increase while diesel decreases, letting the system rely more on renewables: the renewable share rises, curtailment falls, and fuel consumption drops by about 25 %.

The economic trade-off¶

Staged investment costs more in total capital — additional renewable and storage capacity is installed across two steps — but that larger investment substantially reduces fuel costs, because the system depends less on diesel. The net effect is a slightly lower Net Present Cost and LCOE than the single-shot case.

The cost dynamics are also more interesting: as demand grows, variable costs rise, but after the second investment step they temporarily drop, because the new capacity improves system performance and displaces diesel.

Variable cost climbs with demand, then eases after the second investment step reinforces the renewable system.

So far the future has been assumed known. Next we relax that assumption and plan under uncertainty — see Uncertainty & Externalities.