Distributional trade-offs between regionally equitable and cost-efficient allocation of renewable electricity generation

Highlights: • Distributional impacts assessed for decentralized renewable generation (DREG). • Large trade-offs found between cost-efficient vs. regionally equitable allocation. • Least-cost allocation implies concentrating DREG to few most productive sites only. • Solar PV is key for more regional equity with small trade-offs in generation costs. • Policies for cost-efficient DREG allocation risk strengthening regional disparities. -- Abstract: Decentralized renewable electricity generation (DREG) has been growing at an unprecedented pace, yet the appropriate spatial allocation and associated regional equity implications remain underinvestigated. In this study, we quantify the trade-offs between cost-efficient (least-cost) and regionally equitable DREG allocation in terms of electricity generation costs, investment needs, and DREG capacity requirements. Using the case of the ambitious and publicly-approved Swiss Energy Strategy 2050, we set up a bottom-up, technology-rich electricity system model EXPANSE with Modeling to Generate Alternatives at a spatial resolution of 2'258 Swiss municipalities. In order to measure regional equity implication, we adapt the concepts of the Lorenz curve and the Gini coefficient. We find a significant trade-off by 2035 in Switzerland: 50% increase in regional equity when allocating DREG to various Swiss regions on the basis of population or electricity demand leads to 18% higher electricity generation costs. Least-cost allocation implies concentrating DREG and associated investments to few most productive locations only. Solar PV is the key technology for increasing regional equity. We conclude that in countries with spatially-uneven DREG resources like Switzerland, any policies that focus on cost efficiency should anticipate regional equity implications in advance and, if desired, minimize them by promoting solar PV.