A recent article in The Washington Post, which criticized the push for renewable energy in India and Africa, prompted me to reflect on three important narratives. Firstly, let’s explore the ABC model (Anchor, Business, and Community) in the context of solar mini-grid businesses. Most companies, regardless of their sector, thrive on a steady and predictable demand. In the energy sector, this predictability is vital for ensuring a consistent supply. In the ABC model, mini-grid developers prioritize serving commercial and industrial customers with substantial and predictable electricity needs, such as mobile towers, irrigation pumps, and cold storage facilities. The excess capacity generated is then used to provide electricity to small residential consumers. This strategy enhances the utilization rate of mini-grids, reduces risks, and bolsters developer profits. These stable loads are known as ‘anchor loads’ and are the foundation of the ABC model.
For instance, in Haiti, after the devastating 2010 earthquake, micro-grids were proposed as a solution to electrify remote villages. An anchor load, in this case, a telecom tower, shouldered the majority of the installation costs. EarthSpark established a microgrid in the village of Les Anglais based on this anchor load in 2012. By 2013, it was powering a school, small local businesses, and a community of 54 residents. ZeroBase expanded this microgrid in 2014 to a 100 kW hybrid mini-grid, which now serves 430 households, the local market, small agricultural processing units, and other businesses. Customers prepay for their electricity, gaining access to clean, affordable, and dependable power. Additionally, the mini-grid serves as a training ground for Haitian students and technicians, enhancing their skills in rural electrification and microgrid maintenance.
Historically, electrification relied on grid extension, which demands substantial time and resources. In Sub-Saharan Africa, grid expansion projects took an average of six years to complete and cost nearly $100 million. However, the grid does not guarantee resilient, sustainable, or reliable electricity supply, leading to the use of stand-alone generators powered by fossil fuels. For example, Ethiopia, Lesotho, Malawi, and Zambia rely on hydropower, which is susceptible to seasonal variations and declining water levels due to climate change.
As solar energy becomes the most cost-effective form of energy generation in many countries, with clear climate, energy, and economic benefits, its acceptance and political support are growing. To enhance resilience and sustainability, strategies that incorporate a diverse energy mix, combining centralized and distributed renewable generation, are most effective, especially in underserved nations.
In India, approximately 700 solar mini-grids are owned and operated by private companies. These carbon-free mini-grids essentially function as community projects, improving the quality of life in various regions. Effective community involvement, starting from project conception, customization based on community input, and engagement of local workers, is crucial, as is ongoing system maintenance. Underserved areas often encounter challenges in maintaining solar/electricity infrastructure, chiefly because of unskilled manpower. These seriously hinder the reliable supply of electricity and the development of sustainable energy systems on these islands. Training local residents, involving the community, and building capacity for system maintenance are essential. If a grid has been installed, institutions and communities must ensure a maintenance budget and trained staff are available. Relying on external experts is costly and short-term.
Mini-grids are particularly valuable for settlements located more than 10-15 km away from existing power grids, depending on population size and density. Solar-based mini-grid projects can secure funding through a combination of grants, government assistance, and private-sector investments. Stand-alone solutions often require grant-driven initiatives to deploy in areas with limited financial capabilities among consumers.
When the main grid reaches a remote location, there are several models for integrating mini-grids with it. Until the early 1990s, the main grid couldn’t reach rural areas in Cambodia. Consequently, local entrepreneurs invested in and operated hundreds of diesel-powered mini-grids without government support. However, when the national utility, Electricite du Cambodge (EdC), extended the main grid to these rural areas, the electricity landscape underwent a significant transformation. The Electricity Authority of Cambodia (EAC) required mini-grid operators to obtain ‘distribution licenses’ and, in return, allowed them to operate at higher tariffs. Isolated mini-grids were also permitted to become ‘small-power distributors (SPDs),’ enabling them to purchase electricity from EdC or neighboring countries at lower costs than diesel generation. The EAC provided technical assistance on the installation and operation of mini-grids, improving distribution network quality for future grid connectivity. Currently, more than 250 formerly isolated mini-grids are connected to the national grid as SPDs, benefiting over 1 million consumers. The government later intervened to establish uniform tariffs for all SPDs nationwide and introduced subsidies to bridge the gap between the retail tariff and the higher operational costs of SPDs.
In order to expand the deployment of mini-grids for electricity access, especially in less developed countries and with a focus on private sector investment, several crucial facilitating elements must be established. These encompass the need for favorable policies and regulations, access to affordable financial resources, training and skill-building in technical aspects, ensuring the quality and standardization of equipment, and the availability of reliable data. When initiating electricity access projects in various countries, it’s vital to acknowledge the unique challenges presented by each location and to tailor the approach accordingly. Thus, for widespread adoption of solar mini-grids, it becomes imperative to conduct specific assessments for individual countries. These assessments should scrutinize the existing conditions, suggest pertinent modifications and additions, and devise strategies for execution while considering the prevailing policy and regulatory framework.
If the 660 million people who are likely to be left without electricity by 2030 are to be served, solar is the solution we have. Combined with battery storage, solar energy’s affordability, its technical maturity, easy adaptability, bankability combined with its ability to have a multiplier effect on job creation make it an essential solution in achieving universal energy access.
Author: Nikhil Kumar
Nikhil leads communications for the International Solar Alliance.
This article was originally published in pv magazine and is republished with permission.
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