Lcoe Reduction in African Off-Grid Rural Microgrids: a Systematic Approach Using Dsm and Innovative Bchp Integration

Designing cost-effective and reliable off-grid microgrids (MGs) is particularly challenging in rural regions where energy demand is shaped by both household consumption and productive use of energy (PUE). This paper presents an integrated planning and optimization framework that reduces the Levelized Cost of Electricity (LCoE) while enabling scalable microgrid expansion. The approach combines demand-side management (DSM), consumer clustering, and a novel biomass-based Combined Heat and Power (BCHP) operation strategy adapted to seasonal Agro-processing loads. Using the XENDEE platform, the study performs system sizing and optimal energy dispatch based on real-world load data. Consumers are classified through a Multi-tier Framework (MTF), with PUE applications treated as high-tier loads requiring tailored energy support. DSM measures were selectively applied only to PUE loads, with household consumption patterns preserved as fixed constraints during optimization. The methodology is applied to extend an existing microgrid (MG) to serve additional demand, while maintaining the same LCoE and system size through strategic DSM and dynamic BCHP scheduling. Sensitivity analysis is conducted to validate the robustness of the proposed solution. Results confirm that the integrated approach ensures reliable power supply, improves load flexibility, and maintains cost stability—offering practical insights for microgrid planners and policymakers pursuing sustainable rural electrification.