The Potential of Mini Grids

The IEA has estimated that in order to achieve universal electricity access, mini-grids will have to provide around 40% of new capacity by 2030, with the largest percentage (187TWh) needed in Sub-Saharan Africa.*(WEO, 2010).

Why Mini-Grids
Some of the benefits of mini-grids:
Grid-based rural electrification is clearly inadequate
Mature technologies with decreasing CAPEX costs that can utilise local and readily available sources of renewable energy
Mini-grids support productive and business activities while Solar Pico Systems and/or clean improved cook-stoves cannot
Technically capable to feed electricity to the main grid plus smart metering and energy distribution
Better energy-management and user awareness than national grid
The Four Main Aspects of Mini Grids to Evaluate
1. Technology
Two basic elements of mini grids technology
Power generation/storage system that creates and stores electricity from different sources such as PV-solar,wind, hydro, biomass, diesel etc;
Distribution system that carries electricity, meters and bill end users if required

Main Trends/Issues
Due to difficulty of providing enough electricity with just a single source of energy or high OPEX, there has been a recent increase in hybrid systems where 2 or more sources of energy are used, sometimes capable of providing power 24/7.

2. Economics
This aspect is the least developed and sometimes the most challenging part of mini-grids implementation
4 main types of Business Models used
Utility-Model – Generation and distribution through public utility
Hybrid Model – Generation through IPP, distribution through public utility
Private Model – Generation and distribution through private party
Community Model – Generation and distribution in the hands of the local community

Main Trends/Issues
The lack of technical and investment capacity to manage projects effectively plus inadequate regulations and policies framework continue to hamper the sound implementation of the business models.

3. Regulations
The business model and cost alternatives for mini-grids will be fundamentally different from grid-based electricity business models.
Policy frameworks must balance between concerns of 3 aspects:
End-user concerns: It is essential for Mini-grids to identify payment methods that provide fair deals for consumers
Grid operator concerns: Grid operators/owners need to recover operating costs as well as maintenance and repair costs
National Government concerns: Governments seek to maximize electricity access and minimize the costs for electricity users.

Main Trends/Issues
Many African countries still have no clear or dedicated regulations for offgrid solutions but an increasing number are consulting other stakeholders to come up with a thorough framework to support sound business models.

4. Social & Environment
The end-users are more in contact with the mini-grid system than in the conventional power generation approach.

MainTrends & Issues
Including the community as an active element in the Mini-grid operation is essential to make it sustainable and reduce the rate of abandonment but this is often difficult and requires continuous capacity building and awareness efforts.

The above issues and more will be dissected and discussed in greater depth at the Africa Mini Grids Summit. Key decision and policy makers along with the power players in the mini grids sector will share their invaluable expertise and experience to help you effectively strategize your mini grid blueprints.

Be treated to a first class event where pressing issues and solutions are brought to the fore and extraordinary networking opportunities are aplenty.

For more information on registration for the summit.

Contact: Desmond Amankwah

Grenotek Energy and Environmental Services

O543438766

Accra.