Electrification of Sub-Saharan Africa through PV/hybrid mini-grids: Reducing the gap between current business models and on-site experience

The absence of publicly available up-to-date costs breakdown data on photovoltaic (PV)/hybrid mini-grids in Sub-Saharan Africa (SSA) is a barrier that needs to be resolved in order to overcome challenges in rural electrification planning, regulation, life-cycle operation, financing, and funding. The primary aim of this research is to provide better understanding of the cost structures of PV/hybrid mini-grid projects in Sub-Saharan Africa. The review on existing literature reveals significant lack of transparency and inconsistencies in PV/hybrid mini-grid costs. This paper aims to support the fact that there still remains a strong need to reduce the gap between current business model concepts and successfully implemented scale-up electrification models. Based on the experience of PV/hybrid mini-grids projects implemented in various rural communities of SSA, we propose a multi-dimensional cost analysis with a standardised break-down of the real costs of installed projects. Subsequently, we assess the main social and environmental implications and we identify barriers that appear to hinder successful PV mini-grid planning and subsequent implementation in SSA. Africa has the unique opportunity to utilize renewable energy as a primary energy source. Indeed, the continent has the potential to bring electricity especially to its rural population by means of PV/hybrid mini-grids. However, the capability of public and private sector investors to preevaluate projects is limited by the lack of locally available information on PV/hybrid mini-grid costs or the reliability of data (when available). Multi-dimensional cost analysis of social and environmental impacts from this study highlight that PV/hybrid mini-grids offer a unique opportunity to create a standardised framework for quantifying costs of PV/hybrid mini-grids in SSA, that can support decision-making processes for designing viable business models. Findings show that there is a strong need to minimise the data quality gap between current business model and that of successfully implemented PV/hybrid mini-grids electrification projects. This gap could be mitigated through studying the issues that influence mini-grid costs (both hardware and software). In addition to understanding other factors that can influence project costs such as the market maturity and remoteness of the site, organisation capability, development approach, and level of community involvement. Regarding policy considerations, stronger political will coupled with proactive rural electrification strategies and targeted renewable energy regulatory framework would be essential in order to establish viable dynamic domestic market for off grid renewables. In the presented benchmarking analysis, the experiences of public and private development organisations are synchronized to contribute to the furthest extent possible to facilitate the assessment. Those include the disaggregation of component costs according to their unit in order to make comparison more accurate and include site-specific parameters in the discussion of costs.JRC.C.2-Energy Efficiency and Renewable

The impacts of incentive policies on improving private investment for rural electrification in Nigeria – A geospatial study

In Nigeria, 86 million people lack electricity access, the highest number worldwide, predominantly in rural areas. Despite government efforts, constrained budgets necessitate private investors, who, without adequate incentives, are hesitant to commit capital due to perceived high risks. This study identifies three existing incentive policies—concessionary loans, capital subsidy, and financing productive use equipment—aimed at promoting rural electrification in Nigeria. Employing geospatial and regulatory analyses, we evaluate their impact on electrification planning across 22,696 population clusters. While all incentives encourage mini-grids and stand-alone systems, results show varied impacts, predominantly favouring mini-grids. Under the baseline, grid extension is optimal for 66% of clusters, followed by mini-grids (27%) and stand-alone systems (7%). Concessionary loans boost mini-grid and Stand-Alone Systems shares by 10% and 5%, respectively. Capital subsidies increase the mini-grid share to 41%, surpassing concessional loans (37%). Financing productive equipment enhances Stand-Alone Systems and mini-grid shares to 15% and 43%. Incentives impact LCOE, CAPEX, and OPEX, with average LCOE reducing to 0.31 EUR/kWh (concessionary loans), 0.30 EUR/kWh (capital subsidy), and 0.27 EUR/kWh (financing productive use). Financing productive uses proves decisively more effective in lowering costs for mini-grids and stand-alone systems than loans or capital subsidies. The important policy implications of this study reinforce the need for tailored incentives for distinct electrification options

“Tropicalisation” of Feed-in Tariffs: a custom-made support scheme for hybrid PV/diesel systems in isolated regions

The interest and actions towards introducing renewables for off-grid regions has increased due to their ostensible cost-effectiveness, eco-friendliness and quality services provided. Nevertheless, in many isolated areas diesel generators appear as a common option, confirming that there is a need for financial support mechanisms that aid the introduction of renewables due to their higher initial investment costs. This paper proposes a so-called ‘tropicalisation’ of the Feed-in Tariff scheme to promote the introduction of hybrid systems in isolated communities based on the idea of awarding for each kWh produced by renewable energies a premium value during a guaranteed period of time. The proposed Renewable Energy Premium Tariff (RPT) scheme is an alternative mechanism to the usual initial investment donation for off-grid energy development projects by recognising the production of renewable electricity and opting for a long-term sustainability of the projects. Ecuador presents ideal conditions to study the introduction of such a ‘tropicalised’ scheme since a Feed-in Law including off-grid projects was established in 2002 and since there are governmental and local efforts for the introduction of renewable hybrids in isolated regions. Modelling of the introduction of photovoltaics (PVs) into diesel systems for several mini-grids located in isolated regions of Ecuador has been performed, and included a detailed financial analysis for optimisation of RPT values and a comparison with existing stand-alone diesel systems. The results show the cost-effectiveness of PV/diesel hybrids over diesel gensets, taking into account present and future diesel prices. To obtain long-term sustainability of the project, the RPT values are set at 0.70–1.20$ kWh covering the operability of the whole system for 20 years, where the renewable fraction should have the largest share in the hybrid system. The proposed mechanism is expected to aid the introduction of renewable technologies to bring solutions and sustainable energy options to final users of off-grid isolated regions

Universal access to electricity in Burkina Faso: scaling-up renewable energy technologies

This paper describes the status quo of the power sector in Burkina Faso, its limitations, and develops a new methodology that through spatial analysis processes with the aim to provide a possible pathway for universal electricity access. Following the SE4All initiative approach, it recommends the more extensive use of distributed renewable energy systems to increase access to electricity on an accelerated timeline. Less than 5% of the rural population in Burkina Faso have currently access to electricity and supply is lacking at many social structures such as schools and hospitals. Energy access achievements in Burkina Faso are still very modest. According to the latest SE4All Global Tracking Framework (2015), the access to electricity annual growth rate in Burkina Faso from 2010 to 2012 is 0%. The rural electrification strategy for Burkina Faso is scattered in several electricity sector development policies: there is a need of defining a concrete action plan. Planning and coordination between grid extension and the off-grid electrification programme is essential to reach a long-term sustainable energy model and prevent high avoidable infrastructure investments. This paper goes into details on the methodology and findings of the developed Geographic Information Systems tool. The aim of the dynamic planning tool is to provide support to the national government and development partners to define an alternative electrification plan. Burkina Faso proves to be paradigm case for the methodology as its national policy for electrification is still dominated by grid extension and the government subsidising fossil fuel electricity production. However, the results of our analysis suggest that the current grid extension is becoming inefficient and unsustainable in order to reach the national energy access targets. The results also suggest that Burkina Faso’s rural electrification strategy should be driven local renewable resources to power distributed mini-grids. We find that this approach would connect more people to power more quickly, and would reduce fossil fuel use that would otherwise be necessary for grid extension options

A multidimensional high-resolution assessment approach to boost decentralised energy investments in Sub-Saharan Africa

There are over 650 million people in Africa who have no access to electricity; this is in sharp contrast to the continent’s vast untapped renewable energy potential and due largely to the historical lack of investments in energy infrastructure. New investments in decentralised power generation within Sub-Saharan Africa play a progressively important role in increasing energy access and addressing the continent’s electricity supply shortages. Tracking the performance of Sub-Saharan African countries along various socio-political and economic axes can spur the mobilisation of private, public and international sectors in investing in decentralised energy technologies. An increasing amount of high-resolution global spatial data are available, and used for various assessments. However, key multidimensional indicators are mainly still provided only at the national level. To this end, we present a comprehensive and consistent analysis of the attractiveness for decentralised photovoltaic technologies at an unprecedented level of detail using both high-resolution spatial data and national reports. We develop and build a new composite indicator that considers the interplay between social, political, environmental and financial factors at a granular regional level for Sub-Saharan Africa and embeds within it the importance of the local production costs at high-spatial resolution

An action agenda for Africa's electricity sector

To meet the needs of a growing population in a manner that is socially equitable, economically viable, and environmentally sustainable, Africa's electricity sector will require a major transformation (1). It has already undergone some important changes over the past decade. Efforts to expand access to electricity have proceeded at a slightly faster pace than anticipated 10 years ago. In parallel, the deployment of renewable energy technologies has progressed apace, despite new discoveries of natural gas across the continent and favored by the volatility of oil prices. Nonetheless, the expansion and modernization of Africa's electricity sector need heightened efforts, as evidenced by current electrification rates, generation-capacity levels, and security-of-supply indicators. We identify a suite of actions that, if implemented, would put Africa's electricity sector on track to sharply increase electrification rates across the continent while securing long-term access to affordable cleaner energy, and reducing greenhouse-gas emissions and emissions of local-air pollutants (see the figure) (2)

An action agenda for Africa's electricity sector.

Modernization and expansion require heightened effort

An action agenda for Africa’s electricity sector

Modernization and expansion require heightened effort