Solar mini-grids set to play critical role in universal electricity access

Source: Robin Whitlock · RENEWABLE ENERGY MAGAZINE · | July 6, 2020

Mini-grids could play a critical role in providing electricity to rural communities and businesses and in helping to connect the 789 million people worldwide who currently do not have access, according to research by BloombergNEF and SEforALL research for the Mini-Grids Partnership.

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The State of the Global Mini-Grids Market Report 2020 – from the Mini-Grid Partnership (MGP), published by BloombergNEF (BNEF) and Sustainable Energy for All (SEforALL) – is a study, looking at technologies, businesses, regulations, financing, economics and impact assessment in the industry. It looks into the most effective policies for mini-grid development in different countries, including subsidies, licensing, tariff setting and grid arrival. The report includes case study analysis on six locations: the state of Bihar in India, Indonesia, Nigeria, the Philippines, Tanzania and Uganda.

The report estimates that 238 million households will need to gain electricity access in Sub-Saharan Africa, Asia and island nations by 2030 for the achievement of universal access – as outlined by Sustainable Development Goal 7. Mini-grids can serve almost half of this total – an estimated 111 million households. This will require capital investment of an estimated $128 billion between 2020 and 2030. Mini-grids are the most suitable option for many low- and medium-density areas and can address a larger number of low-income families more economically than the alternative options.

New technologies are making it possible for electricity to be provided through more decentralized networks. The costs of PV modules and lithium-ion batteries have continued to fall sharply by 86 percent and 85 percent respectively between 2010 and 2018, and remote connectivity, control and data analysis have expanded the range of available options. Solar hybrid mini-grids that integrate PV and other decentralised energy resources such as diesel generators and energy storage can complement and compete with main grid extensions in terms of the cost of electricity and the speed of deployment.

Grid extension is still the predominant approach for providing electricity access in remote areas. However, the areas that the main grid can reach more economically than off-grid alternatives are slowly being exhausted, and in some places the incremental costs of adding new rural customers via this route are becoming prohibitive. Given that many state-owned utilities are debt-ridden and the need for electricity access is urgent, it is critical for governments and utilities to take a least-cost approach that takes advantage of the breadth of technology options.

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