Reliable and affordable rural electrification is key for the socio-economic development in Africa, Asia-Pacific as well as in Latin America and the Caribbean. While energy can be used for consumption purposes such as lighting, access to information, comfort and entertainment, “Productive Use of Renewable Energy (PURE)” is the key enabler for SMEs to grow faster!
There is a high correlation between energy access and economic growth. The availability of energy opens up possibilities for higher income generation through increased productivity which in turn stimulates higher demand for local goods and products.
PURE can be defined as agricultural, commercial and industrial activities, powered by renewable energy sources, which generate income. Given the dominance of the agricultural sector, it often makes sense to expand the value chain by first coupling with agri-processing. PURE can then be applied at various levels such as by powering machines for pumps, drip irrigation, milk machines, refrigeration, processing and storage of food. Additional advantages can be also achieved from coupling energy provision with mobile charging, IT supply for businesses, mechanical workshops and so on.
While the residential use of electricity benefit from the advantages of PURE, so too does the quality of life of the rural communities. When supported with the right regulatory and framework conditions, investments become sustainable and development cooperation can move to the next level. Furthermore, with public support, more people and businesses can be connected to clean energy thereby leading to entrepreneurship and job growth.
ARE continues to advocate for the clean energy off-grid sector. In order for the sector to meet the expectations of bringing energy access to the 80% rural population out of the 1.1 billion unconnected worldwide, we have published a new ARE statement. The paper entitled "High-profile bankruptcies in the off-grid sector: where do we go from here?" identifies core challenges and sector trends and gives clear key recommendations on best ways forward for the sector.
To find out how ARE can help you to achieve your business goals, please contact me directly. Since May, we are pleased to welcome eight new Member companies: Cleaner Future Oy, Cloud Energy Photoelectric Limited, CrossBoundary Energy Access Holdings, Enri Afrique, Gommyr Power Networks Ltd, Solergie, W&H Solar Ventures and Winch Energy! We look forward to working with you!
Stefano Signore, Head of Unit, Sustainable Energy and Climate Change, Directorate General for International Cooperation and Development, European Commission
The number of people without access to electricity fell below 1 billion in 2017. However, much work remains to achieve the SDG7 sub-target of universal access to energy by 2030. The situation is particularly challenging in sub-Saharan Africa, where more than 600 million people remain without energy access. In addition, the rapid demographic growth in Africa (the population is expected to grow from 1.3 billion to 2.5 billion between 2019 and 2050) will lead to a further increase in the energy demand and therefore need for additional access.
Tackling the energy access challenge is particularly difficult in remote areas where the ability to pay for electricity services is low. This makes it hard for project developers to establish viable and profitable businesses. Focusing on productive uses of for customers such as small businesses, smallholder farmers, schools and hospitals can be fundamental to address this problem. First, it can help ensuring financial viability for the project developer (such as a mini-grid owner) as the above-mentioned customers’ energy demand is generally high. This will allow the project developer to maintain his or her business, thus securing energy access for the population. Second, it can help create jobs and income-generating opportunities, hence spurring local development and economic growth.
With EUR 3.7 billion allocated for sustainable energy cooperation with developing countries (EUR 2.7 billion of them earmarked for sub-Saharan Africa), the EU is a global leader in the field.
In order to achieve the SDG7 targets on energy access, renewable energy and energy efficiency, the EU has recently developed several tools to crowd-in additional finance in sustainable energy sector. The EU External Investment Plan (EIP) contains several guarantee schemes – amounting to EUR 600 million – aimed for the energy sector. These guarantees help to lower the investment risks for energy entrepreneurs and local commercial banks, hence facilitating the development of sustainable and viable energy projects.
Another example is the Electrification Financing Initiative – ElectriFI. Primarily by providing risk capital to private sector led investments, ElectriFI boosts sustainable energy in developing countries. With 18 investments contracted, ElectriFI has contributed to 1 million connections, 253 MW capacity installed and the avoidance of 512 000 tonnes of CO2 emissions (equivalent to about 110,000 passenger vehicles driven for one year). The ElectriFI funded Nigerian company Arnergy Solar Limited is a concrete example of how the EU promotes energy for productive uses. Arnergy provides and maintains rooftop installed solar panels to Nigerian SMEs operating in various sectors, including health, education and hospitality.
It is clear that the goal to achieve universal energy access by 2030 is a difficult challenge. However, it is equally clear that by investing wisely in sustainable energy for productive uses, we have a unique opportunity not only to overcome the energy access challenge, but also to help achieving other global development goals. The EU remains firmly committed to continue its leadership on sustainable energy worldwide, including by harnessing partnerships with key actors in the energy sector, such as the Alliance for Rural Electrification.
Most of the decentralised grids currently developed in rural areas are of little benefit to rural micro-businesses, as they lack appropriate operating hours, are constrained by grids designed for domestic customers and seen as low priority when power availability is limited. Then, these micro-businesses mainly have to use their own energy sources. These are unsuitable solutions for them that provide people with jobs, products and services.
The development of decentralised solar hybrid power plants offers new opportunities to improve rural access to and productive uses of electricity. If the benefits of solar are harnessed, the terms of access and quality of electricity supply can almost match national grids: 24-hour availability with high power handling capability. This is where rural micro-businesses – productive customers – come in.
GERES has developed two green business areas (GBA) in the south-east of Mali powered by hybrid solar / agro fuel solutions (around 10 kWc of solar panels and generators of 20 kVA) and including batteries. These mini-grids offer alternatives adapted to the development of productive activities and less expensive than diesel generators or solar kits that are mostly not powerful enough or may cost a few thousand dollars when sized for truly productive uses of electricity (carpentry, bakery, etc.)
|Number of small businesses (SB) per GBA||From 10 to 20|
|Turnover of SB||EUR 6,000 / month|
|Turnover of the GBA||EUR 6,000 / year|
|Total electric consumption of SB||6 MWh / year|
Useful economic potential is found in towns which have over 5,000 inhabitants or a central position. In these places, providing a few hundred watts per customer is not enough to make the environment attractive to entrepreneurs. There is a need to understand the economic dynamics of the area, anticipate which activities will develop there, have precise details of the equipment proposed, adapt the sizing of both the hybrid power station and the grid accordingly and set out or even require micro-businesses to fulfil the technical conditions needed to facilitate energy supply.
GERES has been working on these issues in West Africa since 2007. Feedback from this experience shows that is in the interests of electricity suppliers to address the needs of these productive customers:
GERES is currently launching the replication of this model in Mali with six new mini-grids over the period 2019/2021 and is participating in the creation of a social enterprise that aims to develop and manage many GBA in West Africa. Their design includes the study of local economic dynamics, and the systemisation of development stages allows to deploy an efficient model that can be replicated in other contexts.
SOLERGIE developed a smart solar nano-grid, the SolergieBox, to provide sustainable power to off-grid communities in rural Africa in a way that nobody else does. The SolergieBox does not provide energy for only light and phone charging, but also for productive use at an affordable price. SOLERGIE has already 310 nano-grids installed in Togo for 1,800 families and micro-entrepreneurs. More than 50 fridges, irrigation pumps, sewing machines, razers, televisions, etc. are generating income for local villagers. These nano-grids have significant impact on the lives of these people, with one person literally saying, “for me you are God”.
The model that SOLERGIE invented is a shared solar system between a maximum of 8 customers. Together they buy the system on a ‘Consume-to-Own’ basis. The more you consume the more you own the system. Every client has a remotely controlled energy meter. With every upfront payment through mobile money an amount of energy is put on the meter ready to consume. The electricity is on 220 V and less limited than a solar home system. The system can grow together with the demand by adding solar panels and batteries. That makes it possible for local people to start a business, like a shop with a fridge or a cinema with a big television. SOLERGIE provides as well small business plans to stimulate entrepreneurship and coach them along the way. In some cases, SOLERGIE even pre-finances the equipment to start with.
Less cables are used in the SolergieBox than in a mini-grid configuration what makes the installation cost per household lower. Also, the risk is reduced due to the fact that the solar system can start small and grow when clients are trustworthy.
In short, a nano-grid deserves its place in the list of economical viable models for rural electrification with a lot of advantages. That is proven by the SolergieBox!
More information can be found on www.solergie.org.
The remoteness and complexity of off-grid energy systems can pose substantial operational challenges. Implementing remote monitoring and management offers concrete cost reduction and reliability. IoT can enable electrification across rural regions with smart, renewable energy to support economic development.
In today’s energy landscape, the number of off-grid energy systems installed globally is large and growing rapidly, serving commercial and industrial loads such as resorts, mines, and mobile phone towers, as well remote residential consumers and communities.
Distributed renewable energy systems often comprise operationally sensitive components such as battery storage, while at the same time skilled technical labour is frequently not available at or close to the site of operation. This situation can lead to high technical operation and maintenance (O&M) spending. Technical O&M costs of off-grid energy systems can be split into three main categories: component replacement costs, logistics and labour:
In this context, the implementation of remote monitoring and management offers many potential benefits starting with reducing O&M costs. That said, the true potential to operate these systems in a “smart” way is not truly captured by the spectrum of vendor-specific tools which currently are in use.
Features that come with advanced vendor-agnostic remote monitoring solutions like e.g. the collection of data from a wider array of components like sensors or smart meters or the integration of data from multiple vendors and assets are transformative for rural electrification in general: Deeper operational insights can be generated to improve revenue protection for operators and owners, technical system design as well as customer service. The total reduction of O&M costs through advanced remote monitoring amounts to up to 18% for component replacement and 19% for logistical expenses. Labour costs can be saved up to 46%.
In the end, utilising advanced remote monitoring and management for off-grid energy systems allows operators to reliably provide clean power in rural locations for the benefit of the local communities.
To learn more, read the full AMMP report
GET.invest, the European programme aimed at mobilising investments in decentralised renewable energy projects, has launched four Market Insight Packages to support project and business developers in the Senegalese, Ugandan and Zambian energy markets.
The newly launched Market Insights cover renewable energy applications in the agricultural value-chain (Senegal), captive power (Uganda), mini-grids (Zambia) and stand-alone solar systems (Zambia). Each package includes a ‘how to’ developer guide, model business cases and case studies. In the publications, GET.invest has summarised a considerable amount of data with which the programme aims to inform early market exploration and pre-feasibility studies.
The Market Insight packages are one part of GET.invest’s bigger portfolio, which offers project developers and financiers services such as market information, matchmaking meetings, a funding database, and advisory for project development. The programme is supported by the European Union, Germany, Sweden, the Netherlands and Austria.
The Market Insight packages can be downloaded free of charge from the GET.invest website.
The market for microgrids is projected to reach USD 35 billion by 2025 -- with a stunning 20.7% Compound Annual Growth Rate (CAGR). The reasons for this projected growth include the falling costs of solar energy, advances in energy storage, the drive to mitigate climate change, the need to enhance grid resiliency, and the cost savings of minimizing fossil fuels in remote generation systems. Now is the time to position for success in this growing market segment.
Organised by the Smart Grid Observer, the 10th Microgrid Global Innovation Forum focuses on microgrid advances in EMEA, Asia-Pacific, and Latin America. The emphasis is maximising the use of renewable and distributed energy resources, refining the positive business model for a range of microgrid deployments, and sharing real-world case studies in both grid-tied and off-grid/remote environments.
The Alliance for Rural Electrification is pleased to be an Official Association Partner for this event -- enter ARE20 when registering and get 20% off!
The AidEx Nairobi Conference was launched in 2014 as a satellite event focused on aid and development within Africa. It is a two-day high-profile conference attracting over 500 A&D professionals from East Africa and beyond.
The 2018 conference theme was: Revolution in the digital age: safeguarding a future for all. How can technology contribute to a positive social impact?
The 2019 theme will be announced soon.
By attending the AidEx Nairobi conference you will be able to:
ARE is happy to announce that it has established a partnership with AidEx Events to increase participation. ARE Members also benefit from special discount rates.
Interested in booking an exhibition booth with a 10% discount or attend with a 15% discount on the participation fee?
Contact: David Lecoque
The OFF-GRID Experts Workshop is a unique, international expert event for off-grid enthusiasts of self-sufficient power supply who are looking for contacts and who are hungry for knowledge. The focus is on the practical exchange of experience and know-how, which is ensured by a varied, interactive and entertaining programme:
ARE is proud to be the official network partner of the workshop.
The main ambition of the African Microfinance Week (SAM) is to provide a unified African platform for exchange on the microfinance issues facing the African continent by bringing together all the professionals of the sector – investors, MFIs, researchers, banks, networks, innovators, governments and others.
The SAM is a whole week to:
The Village aims to present innovative tools and services that can improve the performance of MFIs interested in undertaking a strategic expansion to target increasingly sophisticated customer segments such as SMEs.
The aim of the Village is not only to inspire visitors, but also to offer a concrete path forward by presenting practitioners with the best available solutions, ready to be implemented at national, regional and pan-African level.
Who are the exhibitors of the Fair?
The exhibitors are organisations, such as consulting firms, training centres, start-ups and Fintech companies that have developed innovative solutions, services and tools to strengthen the capacity, the expertise and the performance of African MFIs.
Furthermore, some solutions can be proposed by organisations that provide services to SMEs that enable them to increase their credibility towards
the MFIs and to facilitate their access to financial services.
For the exhibitors, the Fair will represent a tremendous opportunity to meet new clients and partners.
ARE Members benefit from a 20% discount on stand bookings
Contact: David Lecoque
Meet buyers of solar products from the aid and development sector
Working with ARE, this year’s AidEx will include a Pavilion for buyers of Solar and Off-Grid Energy Equipment to meet suppliers.
Now in its 9th year, AidEx is established as the leading platform for the international aid and development community to come together and improve the efficiency of aid.
AidEx is a two-day event, which encompasses a conference, exhibition, meeting areas, awards and workshops. Its fundamental aim is to engage the sector at every level and provide a forum for aid & development professionals to meet, source, supply and learn. AidEx was created to help the international aid and development community engage the private sector in a neutral setting, drive innovation and support the ever-growing need for emergency aid and development programmes.
Solar products are at the heart of the exhibition and we hope you will consider having an exhibition stand in this Solar Pavilion. For bookings placed through ARE, there is also a 10% discount.
Contact: David Lecoque
ARE together with its project partners AMDA, SmartPower India and Swedfund are working to develop consumer protection principles for clean energy mini-grids. The initiative is justified by the need to include consumer rights as part of the business environment and culture of the clean energy mini-grid sector. While the initiative will first focus on India, Nigeria and Mali, we still need more survey participants from these countries and around the world!
All stakeholders involved in the mini-grid sector are invited to participate in the initiative through a questionnaire. The survey should take up to 15-20 minutes to complete.
Contact: Jens Jaeger
The symposium with theme "Energy Poverty in Sub -Saharan Africa: Options for Closing the Gap" attracted more than 90 participants from 14 different countries. South African Minister of Energy, His Excellence Mr Jeff Radebe, officiated the symposium and in his speech he re-assured participants of commitment by South African government to support energy poverty alleviation initiatives. Participants were also informed of a recently launched USD 14 billion IPP program by South African government. ARE Board Member Prosper Magali (Ensol) participated as a speaker at a panel on 'Challenges and Opportunities in Electrification' where he shared private sector views on the importance of policies and investment for rural electrification.
The next symposium will be held in Egypt in October 2019.
As the exclusive off-grid partner at Intersolar, ARE partnered with the German Solar Association (BSW), with the support of the German Federal Ministry of Economic Development and Cooperation (BMZ), to organise the Off-Grid Power Forum: Conference & Exhibition in Munich on 15-17 May 2019.
The Conference was an opportunity for companies and project developers to attract and to raise interest from high-ranking delegations, project partners, policy makers, investors and international press members. The Forum was once again the focal point to learn about the latest trends on future markets, technological solutions and smart applications in a growing cross-sectoral environment, which attracted over 130 off-grid exhibitors.
This year’s Off-Grid Power Exhibition featured ARE Members and their products - EMPO-NI (solar powered water pump), GFM Fotovoltaica (solar mini-grids) and SD Wind (small wind powered mini-grids) -, as well as ARE’s Partners GET.invest and ElectriFI. ARE also shared its booth with the “Low Carbon Off-Grid Communities (LOGiC)” project, where ARE is the communications lead [Press Release].
With around 450 participants, the Off-Grid Power Conference, brought deep insights into the latest off-grid market trends, smart applications and technological power system solutions, including seven ARE Members who showcased their technological and digital off-grid products during the sessions on the following topics:
The High-Level Platform on Sustainable Energy Investments (SEI Platform) is a response to the African Union – European Union summit’s call for greater efforts to establish the right business framework to attract responsible and sustainable investments and accelerate the implementation of the Sustainable Development Goals.
Serving as a thematic task force under the Africa-Europe Alliance for Sustainable Investments and Jobs, the SEI Platform aims at bringing together African and European stakeholders to examine challenges and potential towards common strategic interests: accelerate impact, creating new jobs and inclusive sustainable growth by private and public investments in the energy sector.
The SEI Platform focuses its work on three thematic areas through specific working groups (WG). The composition of the group reflects the geographic, cultural and gender diversity of both continents and have representatives from public, private sector and civil society.
ARE Executive Director Marcus Wiemann, appointed rapporteur of WG 3, was actively involved in bringing in the expertise of ARE Membership on sector coupling and productive use to facilitate socio-economic development through sustainable investments in African rural areas.
Private and public actors participated in the Atelier Off-Grid B2B Togo organised on the sidelines of the first Togo-European Union Economic Forum in Lomé to discuss the issue of access to sustainable energy in the country.
Aware of the enormous potential held by off-grid solutions to advance energy access in support of Togo’s 2030 Electrification Strategy, ARE co-organised, together with the Delegation of the European Union to Togo (EUD), the German Development Cooperation implemented by GIZ and the Ministry of Mines and Energy of Togo, a 1-day atelier in Lomé on 12 June 2019.
The atelier, which attracted more than 140 participants, brought together key players in the off- and mini- grid Togolese market. The workshop included national and international private sector representatives such as project developers, investors and technology providers, as well as public sector officials from the Government of Togo and local authorities, and international development partners.
Although Togo has recently experienced some improvement in the country’s energy access rate, the disparities between urban and rural areas remain acute, at a rate of 87% in big cities against 7% in rural areas in 2017 (AfDB, 2016).
With the aim of increasing visibility about the renewable energy business opportunities in the country and facilitating investments in local mini-grid and standalone projects, the event identified the best financing options and linked key players of the country’s energy sector with national and international off-grid experts, project developers and financiers through B2B session. [Press release] [Media highlights & interviews]
With more than 100 participants, the EUSEW session co-organised by Solar Power Europe, LOGiC and ARE showcased innovative business models and prosumer experiences from the ground to drive the energy transition of key sectors of the economy in European society.
Speakers included Schneider Electric (ARE Member), ENEL, Wind Energy Solutions, Akuo Energy and DG ENER.
The high-profile bankruptcies of a few but well-known brands in the African off-grid industry has raised questions on the long-term viability of current off-grid business models. ARE remains undoubtedly positive and convinced of the long-term health of the off-grid market, buttressed by its core raison d’être which is to deliver about 75% of all new electricity connections at least-cost to achieve universal energy access by 2030 (SDG7).
With this article, ARE seeks to flesh out some of the core challenges and sector trends, and proposes a number of key recommendations on how to move forward and turbocharge the off-grid sector, so that SDG7 can move from being a global political goal to an actual reality on the ground.
Evidence drawn from this year’s Renewables 2019 Global Status Report clearly indicates that renewable power is "here to stay". However, new bolder policy decisions are needed across all sectors of energy end-use to make our energy systems sustainable. The report finds that there has been significant progress in renewables uptake, energy efficiency and energy access, and it states that the world needs to speed up if it is to meet the targets of the Paris Agreement and Sustainable Development Goal 7. A closer look at Chapter 4: Distributed Renewables for Energy Access, where ARE was a lead topical contributor amongst other partners, acknowledges a concentrated but positive global outlook for energy access in developing countries.
Distributed renewables for energy access (DREA) systems continue to play an important role in providing access to modern energy services to households in remote areas of developing and emerging economies. Already, an estimated 5% of the population in Africa and 2% of the population in Asia – or nearly 150 million people across these two regions – benefit from energy access through off-grid solar systems. Building on the momentum of the past five years, DREA systems are increasingly being used to provide access to electricity. In 2017, more than 122 million people obtained access mainly through off-grid solar systems, and the off-grid electricity access sector attracted a record USD 512 million of corporate-level investment in 2018, up 22% from the previous year. Development finance institutions also increased their support to DREA in 2018, directing some 7% of their total investment in energy projects to off-grid systems. However, finance for energy access decreased in 2018 for the second year running and remains far behind the estimated amounts needed to reach universal access to electricity and clean cooking.
The Energy Progress Report chronicles progress toward Sustainable Development Goal (SDG) 7 at the global, regional, and country levels. It is a joint effort of the International Energy Agency (IEA), the International Renewable Energy Agency (IRENA), the United Nations Statistics Division (UNSD), the World Bank, and the World Health Organization (WHO), all appointed by the United Nations as global custodian agencies responsible for collecting and reporting data related to the energy targets of SDG 7.
The Energy Progress Report reviews progress to 2017 for energy access and to 2016 for renewable energy and energy efficiency, against a baseline year of 2010. Its methodology is detailed at the end of each chapter.
Energy Change Lab works with pioneers and changemakers in Tanzania to build sustainable, people-centred energy systems. Their productive uses of energy (PUE) programme helps rural communities increase their incomes and productivity. This paper describes their work with two mini-grid developers to develop and test practical approaches for improving PUE uptake in rural villages through prototypes to build skills and sustainable supply chains. They hope that lessons from this work —including the importance of trust, community engagement and linking into national financing schemes — will help build knowledge and partnerships and scale up the impacts of PUE in Tanzania.
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.