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Stepping stone or leapfrog?

Andrew J Conway

6th October, 2017

New, decentralised forms of energy are taking shape. Will these new forms be a stepping stone to replicating the developed world's centralised power systems, or will they be a leapfrog to a new model of energy provision?. ANDREW J CONWAY reports.

Around 1.5 billion people globally, 600 million in Sub-Saharan Africa, have no access to modern energy

You should take a look at NASA's Visible Earth photographs. Billions of pin-pricks of light sketch out the Earth's continents against the pitch-black land and sea. Look closer, and you can pick out the details: see the Nile snake it's way to Mediterranean Sea, or the trans-Siberian railway cutting right across Asia. Now take a look at what you don't see. Darkness, like a dripping blot of ink, covers much of the Global South. 

New, decentralised forms of energy are taking shape. Will these new forms be a stepping stone to replicating the developed world's centralised power systems, or will they be a leapfrog to a new model of energy provision? 

Reaching the most isolated communities

Around 1.5 billion people globally, 600 million in Sub-Saharan Africa, have no access to modern energy. No electric lights; no television; no internet. The UN aims to "ensure access to affordable, reliable, sustainable and modern energy for all by 2030".

According to McKinsey & Company, around $850bn investment is needed for Sub-Saharan Africa, around 40% of that on transmission and distribution networks alone, with the rest on power generation technologies.

The conventional methods of extending energy access (large, centralised power systems) are failing rural, vulnerable, and isolated communities. Decentralised renewable power can now lower the cost of extending energy access and reach the most isolated communities.

Before me is a small orange cube. On one face is an LED lamp, and its tail is a wire connected to a small, 1 Watt solar PV panel. The cube contains a battery, which can charge mobile phone and power the LED.

Technology like this revolutionises the way we think about extending energy access. Driven by falling costs of solar, batteries and efficient appliances; and the spread of mobile banking, this revolution moves from strength to strength. There are now at least 30 companies, operating in as many countries, supplying solar lanterns and home solar solutions. 

Are Green Mini-Grids the future?

This technology, however, has limits. Undoubtedly there are benefits, such as extending the work and study day, and reducing exposure to harmful kerosene lamps. But they just aren't powerful enough for economically productive activity, like refining agricultural produce or pumping water. Solar home systems aren’t a replacement for a well-functioning centralised grid – they can only be a stepping stone.

Enter Green Mini-Grids (GMGs). A GMG is a power grid that uses renewable generation (such as solar PV, wind turbines or hydro generators, in combination with diesel generators and batteries) to supply energy to homes and businesses.

GMGs can be small, supplying just a few households, all the way up to small towns. The advantage of GMGs over solar home systems is the ability to power productive work. GMGs can be more cost-effective than grid extension, especially for isolated communities, where the distance from the grid makes connections financially prohibitive.

The potential for GMGs has not been missed. National governments in Kenya, Tanzania, India, and others are developing policies to promote implementation. Aid funding is beginning to pile in. The International Energy Agency (IEA) believes that 70% of rural communities in Sub-Saharan Africa that gain access to modern energy services by 2040 will do so through GMGs and other off-grid solutions.

However, the reach of GMGs is currently much smaller than solar lanterns. Due to the additional technical, and regulatory complexity, GMG projects are challenging to get off the ground and sustain them over the lifetime of the project.

Policy perspective 

On the technical side, GMGs pose a specific set of challenges to optimise the operation of renewables, storage and diesel generators. While international engineers can support, local communities should upskill by training engineers who can build, operate, and maintain this vital infrastructure.

National governments and international aid agencies should fund university places and apprenticeships to develop a generation of renewable energy engineers.

From a policy perspective, there are two major barriers for GMGs: first, many national governments subsidise electricity, or impose a single tariff rate across all households. Tariff limits deters investment in GMGs due to the higher cost of energy, even in areas where it is economic, and where communities are willing and able to pay higher rates.

While the intent of the limit is noble, it holds back GMG development. National governments should allow derogations from this policy for GMGs. Tanzania has already done this, and others should follow suit.

Second, national grid roll-out plans could deter GMG developers, even where GMGs are the most appropriate energy access technology to implement. Large and small-scale energy policy needs to be coordinated, based on the best available evidence, and regularly updated.

Clean decentralised energy

From my own perspective as an economist, undertaking detailed economic analysis is difficult due to the lack of granularity of population, economic and energy demand statistics.

It is essential to develop the evidence needed to inform policy. MIT analyst have developed smart ways of deriving data from satellite images, but more data is needed. International aid agencies need to increase funding into data collection in target regions.

Aid funding has come under increased pressure in recent years, as austerity programs continue to squeeze living standards for many households. Stories of ‘miss spent’ funding in the press don't do the cause any favours.

The Department for International Development (DfID - the UK aid agency) do a tremendous amount of good, providing funding for rural electrification programmes. DfID need to get better at publicising their work back home - support may wane if the public doesn't understand the how their taxes are really spent.

Clean decentralised energy, in the form of GMGs, could be a way for some of the poorest countries in the world to leapfrog dirty centralised power systems. There are challenges, and key among the is to protect and increase international aid funding. With enough investment, GMGs can help to transform the lives of some of the most vulnerable people in the world

This Author

Andrew J Conway is an energy economist, consultant, and writer. Visit his blog, Thoughts on energy, ecology, and policy at andrewjconway.wordpress.com

 

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