Techno-Economic Comparison of Microgrids and Traditional Grid Expansion: A Case Study of Myanmar

Myanmar’s electricity supply relies mainly on hydropower and gas-fired generation, yet rural electrification remains limited, with national access at approximately 60%. The National Electrification Plan (NEP) aims for universal access via nationwide grid expansion, but progress in remote areas is constrained by financial limits and suspended external funding. This study evaluates the techno-economic feasibility of decentralized microgrids as an alternative to conventional grid extension under current budgetary conditions. We integrate a terrain-adjusted MV line-cost model with (i) PLEXOS capacity expansion and chronological dispatch for centralized supply and (ii) HOMER Pro optimization for PV–diesel–battery microgrids. Key indicators include LCOE, NPC, CAPEX, OPEX, reliability (ASAI/max shortage), renewable fraction, and unserved energy. Sensitivity analyses cover diesel, PV, and battery prices, as well as discount rate variations. The results show microgrids are more cost-effective in terrain-constrained regions such as Chin State, particularly when accounting for transmission and delayed generation costs, whereas grid extension remains preferable in flat, accessible regions like Nay Pyi Taw. Diesel price is the dominant cost driver across both regions, while battery cost and discount rate affect Chin State more, and PV cost is critical in Nay Pyi Taw’s solar-rich context. These findings provide evidence-based guidance for rural electrification strategies in Myanmar and other developing countries facing similar financial and infrastructural challenges.