There are several benefits to using microgrids, including: [1] Increased Reliability: Microgrids can provide a more reliable source of energy, as they can continue to operate even if the traditional power grid goes down. Contact online >>
There are several benefits to using microgrids, including: [1] Increased Reliability: Microgrids can provide a more reliable source of energy, as they can continue to operate even if the traditional power grid goes down.
approach to achieve universal electrification [6]. Renewable energy minigrids therefore hold enormous prospects for the African energy sector, not only by enhancing energy access, but also by enabling the increased use of low-carbon energy sources, with the benefits for sustainable rural development.
Microgrids serve industries, institutions, communities and other customers in a range of ways. Here we look at eight main microgrid benefits – from keeping the lights in a storm to lowering energy costs to improving community well-being. Eight microgrid benefits. 1. A microgrid improves electric reliability.
These innovations, being tested by mini-grid developers in the field, include using smart inverters to modularly increase grid capacity, bulk procuring components to reduce installation costs, reducing tariffs to spur consumption, and offering appliance financing for grain mills and other productive use appliances to enable customers to
Whether they''re called microgrids or minigrids (another term for remote microgrids that are not connected to a centralized grid), the electricity delivered by the technology has been proven to drive economic development and reduce poverty as well as improve access to clean water and the internet.
With many thanks to colleagues across the DFID network and partners for their inputs and checking of the detail on the programmes below, and none of the blame for anymisinterpretations or mistakes I have introduced.
In March this year the Green Mini-Grids (GMGs) Africa Regional Facility programme officially closed, marking 5 years of DFID support to the development of the sector in Africa. That support is continuing seamlessly, into a second phase, now as part of the wider Africa Clean Energy (ACE) programme. But the transition point remains significant, including for me personally as someone who has been involved since the outset.
If the launch of the programme in 2014 was part of the process of "forming" the mini-grids sector, then I think it''s fair to say the last 5 years has also seen its share of "storming" as a range of approaches have been tried to bringing together the key elements of industrial capabilities, government policy and private finance. With larger country programmes now in place, with increasingly supportive policies drawing on better-evidenced playbooks, and cross-sectoral second generation initiatives like the Universal Energy Facility in development – I think we are now in the necessary "norming" phase, before the "performing" needed to meet the 2030 SDG7 target.
The original GMGs Africa business case had the following stated objectives:
This programme aims to help transform the Green Mini-Grids sector in Africa from a nascent and sporadic series of pilot projects, to a thriving industry on track to contribute the IEA''s estimated 40% of universal electricity access by 2030. This will be achieved by creating a critical mass of experience and evidence of GMGs success in two countries, coupled with improved policy and market conditions for investment in mini-grids regionally.
In the 5 years since the programme started so many things have changed, new partnerships have emerged, new governments have seen the potential of mini-grids, new funding partners have come in to the market, and much more. That makes it difficult really to even assess the programme as originally conceived against how things have gone, but I will have a go, taking each of the key outcomes we hoped could be achieved in turn.
And please – comments, corrections, and different perspectives very welcome. Go ahead and comment below, I will answer if I can, or try to find the answer from other colleagues if not.
Additional public and private investment into the GMGs sector, including 2:1 Private Sector Leverage achieved on DFID investments and new investment programmes in at least 2 additional African countries?
However you work out the attribution, and there have been many contributors to this, I think it''s fair to say that the numbers above illustrate a landscape which has totally changed in terms of the scale of financing, the number and range of financiers, and the number of countries with active investment programmes.
Our partnership in this work with the World Bank and African Development Bank has been important in this. Five years ago, the World Bank had a relatively small amount of programming on GMGs, and the AfDB was just kicking off its work in GMGs, through a SEFA grant awarded to JUMEME in Tanzania. Now, both have substantial and growing portfolios with experienced specialist teams in place supporting their wider policy dialogues and lending operations with partner governments, as well as direct support to the market, and data and knowledge products.
The World Bank ESMAP Global Mini-Grids Facility is working with 42 World Bank Task Team leaders globally (28 in Africa), which have so far had 11 GMGs projects approved totalling over $350m of World Bank funds committed of which an estimated $125m (28%) has been spent to date. The 2019 ESMAP Mini-Grids for Half a Billion People report summarising the learnings from studies and learning-by-doing over the 5 years was published in June 2019 at the GMGs Action Learning Event in Accra. It gathered first of its kind sector data and recommendations on the requirements for scaling up mini-grid development and has been downloaded over 17,000 times so far.
The AfDB''s Green Mini-Grids Helpdesk has now supported 107 mini-grid developers in 36 African countries[1], with 46 MW of planned and implemented capacity, over 50,000 planned and implemented connections, an estimated cumulative investment of over $104 million, and received 98% positive survey feedback from developers. One Nigerian company interviewed said it would have taken 10 years to get to where they are now if they had not received Helpdesk support. Market Intelligence reports have been prepared and released for 15 African countries, with an aim to support new market entrants. These reports have also been used in the design of the Burkina Faso electrification programme, the Nigerian Energy Access Fund, and the AfDB''s ''Desert to Power'' mini-grid strategy.
With DFID support, the AfDB has also strengthened the mini-grid financing ecosystem with two important additions. It brought to market the Facility for Energy Inclusion, a commercial debt platform for small-scale renewables with a strong focus on mini-grids with a target of $400m, of which $265m has been raised so far. It converted the Sustainable Energy Fund for Africa into a larger concessional finance facility with mini-grids as one of three strategic priorities and the ability to do results-based financing. Both initiatives are highly complementary to the on-going market development programme.
Working in partnership as part of the GMGs Africa initiative has also promoted co-ordination between the World Bank and AfDB in this area. Nigeria has been a particular focus of collaboration with AfDB announcing $200m of support in March, co-ordinated with the World Bank''s $350m of which $150m is for mini-grids support – both via the Rural Electrification Agency (whose twitter feed I strongly recommend!).
A strengthened Green Mini-grids sector in East Africa, including at least 500 jobs, as well as at least 5 lead mini-utilities working at scale?
Again, on the market side, it''s clear that the landscape has totally changed since 2014. The creation of AMDA and the growing footprint of its membership, as well as other relevant national and regional industry associations, highlights the growing scale and maturity of the sector. National champions are also starting to emerge, such as GVE Projects and Rensource in Nigeria which are raising capital, delivering sites, creating jobs and signing deals bridging the grid and off-grid, mini-grid and commercial & industrial, sectors.
While regional investment, co-ordination and knowledge platforms provide critical market infrastructure and assets, in the end the rubber hits the road, or gets stuck in the ditch, in national markets. I have found it sometimes inspiring, sometimes frustrating, but always fascinating, to watch progress across a range of African mini-grids markets over the last 5 years.
While the initial thesis was that East Africa, which had seen the early expansion of the off-grid solar market, would also be the first big mini-grid market, the spread of progress is much more balanced across the continent. The following sections attempt a whirlwind summary of progress over the last 5 years in some of the key countries where DFID has provided direct support.
60 kWp Powerhive Mini-grid, in Gionseri village, Kisii county, Kenya (Credit: GMG Kenya Facility)
The Kenya GMG Facility itself has also continued to develop, launching a second call in late 2018 with additional EU Infrastructure Trust Fund support. This has resulted in two new agreements with RVE for 4,600 connections and Renewvia for 1,200 connections, and one more under negotiation with 3,800 connections.
The GMGs landscape in Kenya has also been substantially augmented by the announcement at the 2017 GMGs Action Learning Event in Nairobi of the Government of Kenya and World Bank''s Kenya Off-Grid Solar Access Programme (KOSAP). KOSAP is focussed on hard to reach, dispersed and low-income communities in the dry areas in the north and east of the country. The KOSAP mini-grid component targets 151 sites in 14 counties, with the work divided into 6 lots. The Ministry is expected to issue the request for proposals by mid-2020.
The other main element of DFID support to the mini-grids sector in Kenya has been the Results-Based Financing support provided via the Energising Development Programme which concluded in March 2020. This intervention also focussed in the north of Kenya, and concluded with the delivery of 10 mini-grids and 1,845 connections. Lessons from the Kenya programme, as well as EnDev''s experience in Rwanda with mini-grids RBFs were shared by GIZ at the Accra 2019 Action Leaning and Exchange (ALE) event.
This remains an important and hard-won contribution to electrification in the country, and development of the GMGs sector more widely. As reported in the Annual Review in 2018, when funding has flowed and the regulatory position been clear, developers have been able to deliver quickly. Building on the results of round 1 and recycling unused budgets from projects which could not reach financial close, a second call was launched by REA in 2019. The exact budget depends on the final first round turnout, but is expected to be of the order of $10m. A qualifying stage was held and 18 quality companies were shortlisted to provide full proposals by 30 April. The requested amount of $36m in Expressions of Interest will exceed the available funding if all meet the requirements.
With DFID no longer directly engaged in the GMGs sector in Tanzania I have reduced visibility of what is happening – but the results being delivered, albeit at a slower pace than hoped, remain significant and the ongoing interest of the private sector in the second round is encouraging. A visit was organised along with the Tanzanian Renewable Energy Association (TAREA) in 2019 for Parliamentarians to operational mini-grids, and this generated very positive feedback from the MPs who were not previously aware of the impacts and potential of mini-grids. It has to be hoped that this kind of exposure to the benefits of mini-grid electrification can help encourage policy support to accelerating the roll-out in future.
Water intake at Luponde 2.9MW hydro plant, Tanzania
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