Minigrids in the Money : six ways to reduce minigrid costs by 60%

Dec 13, 2018

Source/author : Rocky Mountain Insititute

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More than 600 million people—65% of the subSaharan African population—lack electricity access. Hundreds of millions more have only an unreliable and intermittent supply, at best. Across much of Africa, many communities and businesses without reliable grid electricity have turned to expensive, noisy, polluting, unreliable electricity from diesel- or petrol-powered generators (i.e., gensets).

The traditional path to bringing power to the unserved millions is to expand the electricity grid, building new fossil-fueled power plants and running transmission and distribution lines to far-flung villages, farms, and homes. That model has worked in the developed world, where strong government agencies and locally organized cooperatives have driven electrification. But the approach has not worked as well in sub-Saharan Africa and other developing regions for several reasons, including:
• high infrastructure costs
• low ability of end-users to pay
• disproportionately small end-use demand in villages
• unreliable and intermittent electricity supplied via grid extension.

Today, innovative business models using modern technologies such as solar photovoltaics (PV) and low-cost batteries are emerging as an effective way to provide off-grid power in rural areas, enabled by developments such as mobile money and pay-asyou-go financing. Rocky Mountain Institute (RMI) and others have already seen these effects on a small scale in communities that have recently adopted innovative off-grid power approaches, such as solar home systems or larger solar-based minigrids.

At the smallest scale, solar lanterns and home solar systems can light a house, run a radio, recharge a mobile phone, and, increasingly, power small appliances such as fans and televisions. The market for these solar home systems is growing rapidly. Equally important, the solar lantern and home systems have proven to be a viable business and market opportunity, attracting hundreds of millions of dollars in investment.

Despite the success of solar lanterns and solar home systems, another critical leap must be made: providing not just watts of electricity but kilowatts. People need not only solar lanterns and mobile phone chargers but also appliances and equipment that support greater economic growth and quality-of-life improvements. Minigrids can bridge this critical gap between smaller, solar-powered off-grid efforts and the hundreds of millions of people traditional grid extension has failed to reach.

Once people have access to larger amounts of electricity, they can use cassava grinders, welding equipment, sewing machines, band saws, refrigerators, water pumps, washing machines, and scores of other important devices. That, in turn, puts more money into people’s pockets, enabling local regions to grow in a virtuous cycle of development that many African governments are targeting.

For this reason, there is currently a vital role for minigrids—small-scale distribution networks with local generation based primarily on solar PV power, backed up with batteries or gensets for reliable 24/7 power. However, although successful examples exist, minigrids have so far largely failed to scale across the subcontinent. Addressing and overcoming barriers will thus be critical for minigrids to deliver benefits for the populations that need them most.

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