Mini-grid as attractive option to shore up generation in West Africa
Nigeria and Ghana are ramping up mini-grid development in an effort to close generation gaps and provide power for millions of people on the sub-continent without access to grid electricity.
Ghana has developed a policy to deploy mini-grids to boost the current rate of electrification to over 200 islands and 2,000 lakeside communities through a World Bank initiative.
Over ten thousand people across five island communities on the Volta Lake will stand to benefit from the first phase of the plan.
In addition to this, Ghana’s finance ministry officials in August said the Swiss Government is committed to developing three additional mini-grid facilities for the rest of the island communities in the Ada East District in the Greater Accra Region.
The country is even making deeper commitment after initiating a policy decision to mainstream mini-grids into its National Electrification Scheme.
Nigeria’s electricity regulator, the Nigerian Electricity Regulatory Commission (NERC) created a draft regulation that will aid the deployment of mini-grids to boost energy access in the country in October this year.
A preface to the document states that the regulation shall promote the engagement of the private sector, communities, non-governmental organisations and other stakeholders in achieving nationwide electrification, and it seeks to minimize major risks associated with mini-grid investments such as: sudden tariff changes, as tariffs would have been agreed in advance by the relevant parties; and stranded mini-grid operator investments due to the connection of the main grid to mini-grid in circumstances where the main grid has been extended to cover the mini-grid area.
“We are going to sensitise the general public on the mini-grid regulations. So, the regulation is to encourage investment in renewables such as solar and biomass without restricting anybody,” Haliru Dikko NERC’s Deputy General Manager in charge of Renewables, Research and Development told journalists.
He continued: “It is to encourage investors on off-grid, not only in the main grid so that they can bring power to the rural communities at affordable costs and also protect investors who are going to invest in mini-grid. There is no such regulation in place at the moment.”
The draft a regulation provides for permits and tariff approval procedures, which will ease the administrative burden on the mini-grid operator and ensure the process of obtaining the permit in a timely manner.
“The regulation will minimise risks in tariff changes, as tariffs would have been agreed in advance by the relevant parties, as well as other risks to protect consumers and investors,” Dikko said.
It does this by making permit optional for a mini-grid operator that distributes up to 100kW. For anything over this amount and installed generation capacity of up to 1MW, a permit will be required yet it will not hamper efforts of operators.
“Beyond that limit, a full licence is required which is outside of the scope of this regulation and is taken care of by other already existing Regulations,” Dikko said.
Why mini-grids?
Africa is considered and referred to as the “sun continent” or the continent where the sun’s influence is the greatest. According to the “World Sunshine Map”, Africa receives many more hours of bright sunshine during the course of the year than any other continent of the earth as many of the sunniest places on the planet lie there.
The International Energy Association, a Paris-based think tank, in its report on Photovoltaic stated that despite the large solar potential, penetration of solar power in Africa’s energy sector is still very low.
Mini-grids offer opportunity to increase penetration of solar power in West Africa. Rural communities often not connected to national grids are positioned to take advantage of solar power at affordable rates because solution is provided based on energy needs.
The model has the advantage of using as feedstock the energy means prevalent in the location. In many parts of West Africa, solar and wind energy sources are gaining prominence in adoption as mini-grid energy source.
Nigeria currently gets 80 per cent of its power from gas-fired power plants but has the challenge of transporting the gas from the volatile Niger Delta where they are found to other parts of the country where power plants are located. Investors are considering setting up mini-grids that uses gas as feedstock but through compressed gas and for segments of the population.
Also construction of mini-grids drives down the cost and time required to electrify a community.
“It can take as much as 9 years for most communities in Nigeria to get electricity using the national grid model. From studies, negotiations of right of way, installation, all these take a lot of time but an investor building a mini-grid in a community could electrify a community in as little as six months,” said AbdulRahman Abiola-Odunowo, MD/CEO PNN Group in a meeting with interested investors in mini-grids in Lagos on December 8.
Already something akin to revolution in the sector is being witnessed in sub-Saharan Africa with the rise in the number of rooftop solar and mini-grids. DiscourseMedia reports that companies like Powerhive, SteamaCo and JUMEME are building hundreds of mini-grids that will power millions of customers in East African countries like Tanzania, Kenya and Rwanda.
It reports that solar “pay-as-you-go” companies, tapping into the power of near total mobile phone (and mobile money) penetration, are also seeing huge growth in East Africa.
At latest count, M-KOPA has more than 300,000 customers, Mobisol expects to have connected 100,000 households this year and off-grid electric is targeting one million customers in Tanzania. And the momentum in East Africa is spreading west to Nigeria, which is the biggest potential market, representing one-sixth of sub-Saharan Africa’s more than 600 million rural unelectrified.”
Solar Nigeria program is making a major dent, supporting access to household energy for more than 130,000 people, while company Nova Lumos is targeting 100,000 customers in Nigeria by the end of 2016.
A successful model
India represents the best model to follow in rapid adoption of mini grids using renewable energy. In 2016 alone, the share of renewable energy in total power generation increased from 4.97 percent in 2012-13 to about 5.7 percent by February, according to data from the Central Electricity Authority, the country’s apex power agency.
India recently unveiled the world’s largest solar plant in Tamil Nadu, signed a $1 billion loan from the World Bank for solar power.
“India is on track to install more than 10 GW of renewables per year from 2017 as large-scale renewables, rooftop solar and off-grid sectors show impressive growth,” Bloomberg New Energy Finance (BNEF) said last month in a report titled Financing India’s Clean Energy Transition.
The country’s total annual investments in utility-scale projects crossed the $10 billion mark in 2015 and government’s “175 GW renewables by 2022” target includes 135 GW of utility-scale projects.
ISAAC ANYAOGU