Mini-Grids for Africa
In many cases mini-grids are the most effective way to provide access to low cost sustainable energy and other innovative solutions like waste plastic to fuel, water from air or small scale desalination as they are flexible, easily installed, and can be connected to the main grid if and when the national network expands. They also offer long-term development impact by reducing carbon emissions and creating new jobs and business opportunities.
Funding initiatives have an important role to play in supporting the transition of mini-grid models and technology from proof-of-concept to scale. To date, the multi-donor funds have provided funding to 43 EEP renewable energy mini-grids projects in 10 countries in Sub-Sahara Africa and many more in other parts of Africa from other agencies (funders).
A few of the challenges in building mini-grids in Africa
Many countries in Africa still lack specific policies for mini-grids in their national electrification plans, which makes planning difficult for private developers. Regulatory issues impact site selection, licensing and permitting procedures, future grid integration, and the access of developers to national subsidy schemes. Projects are often delayed due to the long lead time required to apply for concessions, licenses and environmental approvals. Regulatory requirements are often fixed costs, independent of the size of the project, and can be very expensive.
Waste2Energy Global and their partners has a list of countries that have focused on enabling Mini-Grid in Africa.
Regional associations have an important role to play in the renewable energy sector in improving coordination and closing the information gap between practitioners, investors and policymakers. They offer valuable platforms for private and public-sector stakeholders to consult and collaborate on building enabling regulatory and financial frameworks for the sector.
In countries where the processes are clear, such as in Tanzania and Rwanda, development proceeds more quickly and smoothly. There is also increasingly widespread support from local governments and rural electrification agencies (REAs), including some co-funding for infrastructure.
Waste2Energy Global strategy is to partner & co-fund with these regional associations and multi-donor funds.
The consumer cost of electricity from mini-grids remains higher than tariffs for the national grid, which are generally cross-subsidised and not cost-reflective. Smart meters, remote monitoring and demand-side management technologies are reducing costs and improving the efficiency of mini-grids in rural areas. However many developers still find it difficult to become profitable and seek grants or subsidies to cover capital costs and sometimes operational costs.
In order to spur private investment, countries need to have clear and transparent guidelines for mini-grids to be connected to the national grid and compensated accordingly.