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© RES4Africa
Kudakwashe Ndhlukula, Executive Director, SACREEE
About 52% of the population in the SADC region have no access to electricity, with an average of 68% living in rural areas. Despite the vast renewable energy resources of the SADC Member States, the renewable energy market remains largely underdeveloped. The challenges encountered in efforts to extend the electricity grid specially to remote sparsely populated rural areas have proven the cost effectiveness of using distributed renewable energy for increasing energy access. Expanding access to modern, reliable and affordable energy services has therefore become a key regional priority.
The Southern African Development Community (SADC) Centre for Renewable Energy and Energy Efficiency (SACREEE) was established as a subsidiary organisation of SADC, by the SADC Ministers responsible for Energy in July 2015 in Johannesburg, South Africa and endorsed by the 35th SADC Council of Ministers Meeting in August 2015 in Gaborone, Botswana. Based in Windhoek, Namibia, SACREEE was established to contribute towards increased access to modern energy services and improved energy security across the SADC Region through the promotion of market-based uptake of renewable energy and energy efficient technologies and energy services.
SACREEE was mandated to play a key role in the implementation of the recently adopted Southern Africa Renewable Energy and Energy Efficiency Strategy and Action Plan (REEESAP), whereas SADC Member States will develop their own Renewable Energy (RE) & Energy Efficiency (EE) Strategies and Action Plans and thus kick-start national processes to accelerate energy transitions in the region. SACREEE, among others, acts as a: Think tank, lobbying agent and advisory platform for RE & EE; and facilitator for capacity building, knowledge and technology transfer in SADC.
Since 2015, SADC Member States have greatly increased their commitment to renewable energy and energy efficiency, including important innovations to stimulate mini-grids and distributed renewable energy. The Member States are progressively turning to distributed renewables for energy access to improve energy access for rural populations as well as low-income communities and peri-urban areas, with the exception of Mauritius and Seychelles, where rural and urban energy access is at 100%. To address this problem, as well as the challenge of dealing with growing financial constraints, rural electrification efforts in the SADC region are moving strongly towards incentivising the use of mini-grids and/or solar home systems and other mini- and pico-scale technologies. The rate of uptake is gradually improving as most countries offer enabling policies and the private sector comes with innovative business models for provision of off-grid systems and sustainable energy solutions.
Most SADC Member States have developed national energy access targets, typically linked to the rate of electrification – that is, the percentage of the population that is able to access electricity through either the main grid or mini-grids. Some of the countries with specific rural electrification targets include Angola, Botswana, Democratic Republic of the Congo, Eswatini, Madagascar, Mozambique, Namibia, South Africa, Tanzania, Zambia and Zimbabwe, in line with the goal of Sustainable Energy for All.
SACREEE and ARE have drafted a Memorandum of Understanding (MoU) that will be signed at the upcoming ARE Energy Access Investment Forum to be held on 18-19 March 2020 in Lusaka, Zambia. The MoU establishes a framework for strengthened cooperation between the Parties. The Parties agree to pursue areas of collaboration through the identification and development of programmes and projects, and to cooperate closely and consult one another on matters of mutual interest in order to achieve their common objectives. EAIF is hosted by ARE and GET.invest with the support of SACREEE as a demonstration of the collaboration under the MoU.
For more information please contact: energy@sacreee.org.
Further links: https://www.sacreee.org/; https://www.sadc.int/
Mini-grids have undergone a significant transformation since their initial application directly alongside the trajectory of rapid technological development. While mini-grids installed until the 90s relied heavily on diesel fuel (1st Generation Mini-Grids), the early 2000s ushered in a new era with a focus on renewable energies, both through the hybridisation of existing diesel mini-grids and through the buildout of new renewable energy-based mini-grids (2nd Generation Mini-Grids).
More recently, the widespread use of new communication technologies has rendered mini-grids increasingly digitalised, with automated (mobile-money) payment mechanisms, bi-directional SMS communication, remote monitoring and data analytics, predictive maintenance, operations and management (O&M) logistics optimisation and call-centre-based customer services. While technical and IT developments of the ultimate 3rd Generation mini-grid experience are ongoing, a 4th Generation of mini-grids is already on the verge of conquering the market.
The automation and standardisation of processes implemented in an advanced 3rd Generation Mini-Grid make it possible for this type of mini-grid to be operated by virtually any company from any sector, even without prior in-depth mini-grid expertise. The only true prerequisite for successful operation becomes accurate accounting and professional financial management. This creates a wealth of opportunities for domestic and international industrial companies that are interested in developing rural agricultural products, rural natural resources or operating rural government infrastructure. 4th Generation Mini-Grids harness this potential, unleashing cashflows beyond the simple sale of electricity. Building on the unique relationship between mini-grid operator and rural community, 4th Generation Mini-Grid models generate and capture synergies between the “electricity” business and a secondary business onsite. Examples for 4th Generation Mini-Grid models are the “KeyMaker Model”, the “Multi Utility Model”, and the “Agrihub Model”.
Under the “KeyMaker Model”, mini-grid operators [pre-]process local goods using mini-grid electricity, which reduces transport cost and increases product quality to trade the resulting products on national or international markets (as done by JUMEME in Tanzania and Zengamina in Zambia). Under the “Multi Utility Model”, mini-grid operators generate synergies using mini-grid staff also for the operation of government infrastructure such as roads or ferries (as done by KIS in Uganda). The “Agrihub Model” uses the relationship between the mini-grid operator and the community to upgrade smallholder farmers’ methodologies - i.e. with local drip-irrigation. Some of these models have already proven to significantly increase the financial viability of mini-grid operators, while others are still in development.
All 4th Generation Mini-Grid models have common characteristics:
The consultancy INENSUS is a forerunner in the development of 4th Generation Mini-Grid business models. We have implemented and tested various models in our own mini-grids as well as with our clients. Our experts support governments in the design of policy and regulatory frameworks (e.g. in Nigeria, Sierra Leone, Togo, Burundi, Ethiopia, Myanmar), provide technical assistance to support programmes (implemented by organisations such GIZ, UN, EU), to development banks and national governments in structuring their mini-grid funding programmes (The World Bank in Nigeria, Ethiopia, Burundi, Namibia), assist mini-grid investors and financiers in conducting Technical Due Diligences and directly support more than 100 private mini-grid developers and operators across Africa and Asia in technical system design, business model development, financial modelling and acquisition of finance (under the AfDB GMG Help Desk and other mechanisms).
Victron Energy is a world leader in the development and manufacture of components for battery-based energy systems. In the off-grid solar market the Dutch company - founded in 1975 - is renowned for its reliable products (inverters, inverter-chargers, solar chargers, etc.) which are used worldwide in residential, commercial and industrial applications.
Victron Energy unveiled a new range of pay-as-you-go (PAYGo) solar power systems for households and small businesses at the Global Off-Grid Solar Forum & Expo 2020 which took place on 18-20 February, in Nairobi, Kenya.
Modular system for all
The SHS 200 MPPT is a smart solar charge-controller with a control screen and fifteen load outputs. It is designed to power direct current appliances such as LED bulbs, phones, hair clippers, a TV or a fridge. The SHS 200 is used in combination with solar panels (up to 200 watts) and a 12V battery (lead acid or lithium).
The design of the SHS 200 allows customers to upgrade their installation step by step according to their needs, and budget. For example, a 200 watts installation can provide sufficient power to run a 24” TV for eight hours per day; a 60L fridge or a fan; and half-a-dozen bulbs delivering 230 lumen performance for eight hours. This capacity will be found to suit the needs of many households and businesses located in rural or suburban areas.
The SHS 200 features a keypad for low-cost and reliable offline pay-as-you-go activation. It is equipped with the OpenPAYGO Token technology - an agnostic PAYGo algorithm which allows distributors to work with their preferred PAYGo platforms (e.g. PaygOps, Paygee, Angaza) - or even their own proprietary platform.
The SHS 200 is a completely revamped version of a product that was initially owned and commercialized by Solaris Offgrid until mid-2019. The technology is widely proven with thousands of units already installed in Africa and South-East Asia. With the support of Solaris Offgrid engineering teams, Victron Energy re-designed some aspects of the initial product, improving its modularity and providing a five-year warranty.
Matthijs Vader, CEO of Victron Energy explains: “We believe our extensive experience in manufacturing competitive solutions for the off-grid market can contribute to the development of the PAYGo industry and provide opportunities for many to access quality solar systems.”
More power, more opportunities
A larger PAYGo system offering 400W - 800W with optional inverter for AC supply is being developed by Victron Energy.
For more information about Victron Energy and the SHS 200, please get in touch with Yoann Le Fol (sales manager West and Central Africa / PAYGo) at ylefol@victronenergy.com and visit their energy access page.
Renewvia Solar Nigeria Limited, a subsidiary of Renewvia Energy, is commissioning its first two solar mini-grids in the Niger Delta in February. The communities of Oloibiri and Akipelai are both located in Bayelsa state and Oloibiri is the site where oil was first discovered in Nigeria. Even with that notable position in the history of the country, the community has not lived with a reliable and affordable power source.
Both projects were supported by All On and are the second and third finished solar mini-grids under the Nigerian Electrification Program funded by the World Bank. The two combined microgrids will initially power over 400 households and businesses. Renewvia is proud to be one of the first developers pre-qualified by the Nigerian Rural Electrification Agency and to have commissioned some of the first sites in the program.
The logistics of Niger Delta are challenging, as Akipelai’s mini-grid site is only accessible by boat. All materials had to be broken down to almost individual components for transport via small vessels to the project site. Renewvia engineered the project to adapt to the land where the project was implemented. In both cases, significant distribution lines were required to be built to deliver power to the load centre. Local workers were employed to build and maintain the mini-grids.
Renewvia chose the Nigerian Payment Solutions provider, Paga, as the mobile wallet platform to interface with Renewvia’s proprietary payment solution. Choosing Paga created additional jobs for multiple community members to supplement income by acting as Paga Agents. The power is procured exclusively on a prepaid basis. The community power subscribers can add value to their Paga wallets via the agents and purchase any amount of power as needed. The subscribers are not saddled with a large up front payment to be eligible to be a subscriber. The only requirement is activating a Renewvia Solar Nigeria Account which includes Paga.
The Nigerian Regulation allows for scalable off-grid development. Renewvia has a large and growing pipeline of off-grid projects in Nigeria, and committed funding to exponentially increasing deployments starting in 2020.
When Clean Power Indonesia built the first community-based biomass distributed power plant as proof of concept in the remote Siberut island of the Mentawai islands regency, we understood the magnitude of the challenge of combining social and environmental agendas into the project. The risk to fail in this first project would be big as no one has ever done it before. For years, Indonesia’s power sector is dominated by a handful of players mostly focused on fossil fuel exploitation and conventional technologies.
But, we know from the get-go that the social and environmental criteria of the project will frame and guide us from start to finish. They also guide our relationships with local governments, ministries, off-takers, as well as our local partners, technology providers and investors. We strive to be true to this mission while we negotiate with various project stakeholders such as donors, investors and lenders.
Our social criteria focus on project relationships with local stakeholders and our environmental criteria take a look the at use of natural resources in the surroundings of the power plant, waste management, pollution, biodiversity conservation, and first and foremost, the greenhouse gas emission reduction. The criteria can also be used in evaluating potential environmental risks and how the project will manage those risks.
In a large archipelago like the eastern part of Indonesia, biomass power plants will certainly create longer lasting economic impacts to local communities than diesel powered generators because biomass does not rely on a long logistical supply chain like diesel fuel. Renewable energy creates more local jobs and bigger economic impacts worldwide than the fossil fuel industry. By switching from diesel fuel to local biomass, power producers actually become an agent of development to underdeveloped regions and an enabler of social empowerment. Utility companies can work with private power producers in order to supply equitable, reliable, affordable and sustainable electricity to remote communities.
Therefore the proposition is simple. Indonesia needs to treat the transition from finite fossil fuel sources and in many cases imported fuels to abundantly available local renewable energy sources as an urgent and important national priority. Renewable energy will also need to be positioned first and foremost as a job creation program and a large scale effort to reduce greenhouse gas emission. The creation of large biomass energy plantation combined with land restoration efforts must be encouraged all over the archipelago.
Clean Power Indonesia is the recipient of Sustainable Business Awards 2019 in Small and Medium Enterprise (SME) category
Sinexcel's latest solution was used to illuminate a remote village with a PV hybrid energy storage inverter. The system is useful for local electricity contribution, which works well to enhance the quality of life of the community members.
Currently, there are many villages in Myanmar without a good power supply, some sites using diesel, while others have none. The project below is a typical World Bank financial support microgrid solution from Sinexcel for Myanmar.
Sinexcel is an international company expert in inverters and microgrid solutions, generating more than 300 MW of battery energy storage solutions for the world since 2010.
System block
The microgrid solution is combined with the most advanced Sinexcel modular design inverter technology: Alpha ESS Battery, EVE battery cell, and an IP54 design container solution. The container is combined with an air-conditioning, fire extinguishing system.
Working principle
This is a 60 kWp PV-Diesel hybrid system with 50 kW inverter and 160 kWh of battery back-up. The system generates energy during the day and the energy is consumed by the load directly. The extra energy produced after the load consumption is stored in the battery bank. Low sunshine days result in low energy generation during which, the battery bank together with the PV panels provide the required energy needed for the load. Post sunshine hours are covered by the battery bank and if/when the battery back-up runs out, the diesel generator supports the load independently.
Challenges
Customers will likely increase their electric load once they have power.
The system is stable and reliable when working with PV, battery and diesel generator.
Thanks to Sinexcel’s modular design technology, as well 10-year micro-grid battery storage experience, the PV system works out as a perfect solution for local communities.
For around a year, RES4Africa Foundation has been working on its Water-Energy-Food (WEF) Nexus programme as an approach for Africa's sustainable development. Within the programme, with the support of Enel Foundation, RES4Africa analysed more than 20 integrated electrification projects and innovative business models, and their regulatory and financial contexts, in rural Sub-Saharan Africa. The findings were presented in "RE-Thinking Access to Energy Business Models".
Different partnerships between NGOs, communities and the private sector are allowing WEF Nexus projects to spread. However, their replicability at scale is hindered by business models that rely on donations and subsidies, as well as the high perceived risk by traditional developers and investors.
Integrating investments in renewable energy with investments for the supply of complementary goods and services (ice for food preservation, electronic devices, and so on), and in closely related sectors (agriculture, breeding, etc.) is a key strategy to diversify revenue streams, support cash flow and strengthen the socio-economic sustainability of projects. In fact, integrated projects are the ones with better results in the analysis, both financially and in terms of sustainability.
Complementary activities have a cost that developers and investors must take into consideration. On the one hand, identifying and investing in local needs stimulates energy demand growth, increases the expected revenues and improves a project’s economic sustainability. On the other, an increased capital expenditure comes with greater financial risks.
In a market increasingly attentive to the Sustainable Development Goals (SDGs) and impact indicators, projects that integrate a water-energy-food approach have a competitive advantage in accessing economic resources. Thanks to financial instruments that enhance the impact and local development, it is possible to reduce investment risks and bridge the gap, still present in the project cash-flows, to ensure the projects’ bankability.
Great enthusiasm surrounds this growing and innovative sector. But the rural electrification market, and in particular that of mini-grids, still needs targeted support policies and the right kind of finance. Governments, financial institutions and development agencies are called to collaborate with the private sector to ensure clear and transparent regulatory frameworks, and to promote financial instruments that accelerate investments in this sector, still too niche compared to the over 600 million people in risk of remaining without electricity beyond 2030.
RES4Africa believes that integrated models and innovative partnerships play a key role in ensuring sustainable energy for all, giving positive energy to a continent that will have to keep pace with demographic growth and unprecedented urbanisation.
The webinar, which was attended by over 30 participants, was a joint presentation of a recent study by EEP Africa and ARE profiling selected project case studies, from the EEP Africa portfolio, which have proactively promoted the productive use of energy. The projects highlight the evolution of productive use business models and identify some of the key innovations taking place in the next generation of initiatives combining clean energy and green growth. [Recording]
The full EEP Africa study on Powering Productivity can be found here.
Contact: Deepak Mohapatra
ARE Members are strongly encouraged to participate in the ARE AGM session which will take place at Radisson Blu, one day prior to the Energy Access Investment Forum on 18-19 March 2020. [Register]
The AGM is the perfect opportunity for ARE Members to sit down with the rest of the Membership and the Board to discuss ARE's future strategy and direction. ARE Members’ presence is therefore very valuable as this will help determine what the next Secretariat strategy and activity focus will look like.
Contact: Marcus Wiemann
EAIF is a well-established political exchange and business event organised by ARE with local and regional partners - aimed at assisting the private and public sector to get up to speed on the latest developments in the off-grid sector and do business.
The ARE Forum is supported by our long-standing partner GET.invest, a European programme that mobilises renewable energy investments. The Forum will feature a GET.invest Business-to-Business (B2B) Matchmaking Session. The session will provide participants with an opportunity to connect with potential business partners, public and private investors and policymakers in a series of select personal meetings.
The Forum offers the opportunity:
As conference organiser, your health and safety are our priority. We have made sure to compile the latest up-to-date information on the official status of Coronavirus and taken the pertinent measures. Kindly refer to our Novel Coronavirus Update for further information.
Contact: Ling Ng
The week-long training course organised by RES4Africa Foundation and supported by Enel Foundation will focus on business models and technologies of decentralised renewable energy systems for productive uses. The training is happening along the sidelines of the 6th ARE Energy Access Investment Forum.
The training curriculum provides participants with a comprehensive set of skills necessary to successfully design, develop, manage and operate decentralised renewable energy projects, through interactive training modules led by experts in the renewable energy value chain. The participants will have the chance of acquiring first-hand practical know-how on decentralised energy systems for productive uses, business models and project management skills. [Register]
Contact: info@microgridacademy.org
ARE, supported by its partner GET.invest, is delighted to invite off-grid stakeholders to join the ARE Off-Grid Business Delegation to Mozambique on 22-25 March 2020.
The business delegation will give delegates the opportunity to:
The business delegation is happening in conjunction with Renewables in Mozambique 2020 Conference in Maputo organised by ALER and AMER (powered by GET.invest) on 23-25 March 2020.
Contact: David Lecoque
Co-organised by the Smart Grid Observer and the Alliance for Rural Electrification (ARE), the 12th Microgrid Global Innovation Forum, in Bangkok brings together thought leaders, utilities, energy providers, project managers and other stakeholders for two days of focused networking and information sharing concerning the latest technological developments, design, implementation and operation of hybrid renewable energy microgrids. The emphasis is on maximising the business case for microgrids, integration of renewable energy, and sharing real-world case studies of both grid-tied and off-grid/remote systems. [Register]
Countries such as Thailand are making a concerted effort to service remote and off-grid locations with solar and other renewable energy resources. The time is now to move toward decarbonizing the energy mix in developing regions such as Southeast Asia. Join us in Bangkok next April to see how your company can play an integral - and profitable - role in this seismic energy shift.
Contact: Jens Jaeger
Present your projects and technology solutions to public and private sector players! Supported by the German Federal Ministry of Economic Development and Cooperation (BMZ), this year’s Off-Grid Power Conference is an outstanding opportunity for companies and project developers to attract and to raise interests from high-ranking delegations, policymakers, investors and international press members by taking part in the Off-Grid Power Conference on 17-18 June 2020. The Off-Grid Power Conference is the focal point to learn about the latest trends on future markets, technological solutions and smart applications.
BSW-Solar is the exclusive partner of Intersolar Europe and is traditionally the off-grid spotlight of the Intersolar trade fair. Together with them and Intersolar Europe, ARE offers a unique marketing opportunity for companies active in the field of off-grid solutions:
More information to follow shortly.
Contact: Jens Jaeger
With this publication, ARE highlights lessons learnt from 11 private sector driven clean mini-grid projects across South and South-East Asia. The purpose is to assist developers with know-how for the development of future projects and to inform investors about what to expect when considering mini-grids in their investment portfolios in this specific region.
The 11 case studies, that come from eight different countries (Bangladesh, Cambodia, India, Indonesia, Myanmar, Nepal, Philippines and Thailand), include both financial and technical data, and also span across technologies from solar PV hybrids to biomass and hydro projects.
In total, the projects provide electricity to 5,715 households and have lowered GHG emissions by an estimated 3,257 tonnes CO2 per year. Moreover, via the productive use of renewable energy (PURE), nearly 1,000 jobs have been created in local communities.
The publication demonstrates the potential of the private sector to be a frontrunner in achieving SDG 7, bringing technological and financial innovations to build investable portfolios of clean energy mini-grids, which can power the rural economy in emerging countries.
Achieving universal electrification by 2030 (SDG7) implies the provision of electricity access to more than 1.2 billion people cumulatively, of which the majority characterises as highly climate vulnerable. Together with the climate advisory network the greenwerk, researchers from the Reiner Lemoine Institut (RLI) assessed in a global study Off-Grid Systems (mini-grids and solar home systems) regarding their importance for electrification and climate action. Particularly the impact of off-grid technologies for providing electricity access in 52 target countries with low electrification rates was quantified. Furthermore, market potential, related greenhouse gas emission mitigation and the respective socio-economic benefits were analysed.
For close to a decade, EEP Africa has played a key role in early stage testing and refining of innovative applications of clean energy and productive use in Southern and East Africa. By enabling companies to pilot new business models for mini-grids and stand alone systems, EEP Africa is contributing to the financial sustainability of the clean energy sector and providing valuable lessons learned in delivering green growth in local economies.
This study, based on interviews with projects in the EEP Africa portfolio, presents an analysis of selected case studies in which project developers are supporting productive activities such as agri-processing, light manufacturing and entrepreneurial services. These highlight an evolution in productive use business models and identify some of the key innovations taking place in the next generation of projects and companies combining clean energy and green growth.
In the mini-grid sector, the business models adopted by EEP Africa project developers have evolved to meet demand and market challenges. The level of engagement by the energy service provider depends on which model they adopt and where they position themselves in the local value chain.
Please note that views expressed in the Co-Editorial, the In Focus section and the Special Feature of the newsletter, are those of the contributors and do not necessarily reflect ARE’s opinion.
