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Green off-grid systems

Clean electricity at last for more than a billion people?

Text: Birgit Scheuch, 14.03.2022

The seventh UN Sustainable Development goal could not be any clearer: by 2030, “ensure access to affordable, reliable, sustainable and modern energy for all.” But how can this be achieved? The answer lies in an independent, local or regional electricity supply based on renewable energy sources.

„It’s hard to imagine a place without any electricity. Imagine how eerie it would be, out on the streets at night with no sources of light. You wouldn’t leave your home.“

What Heiko Stieber, project manager at SMA Sunbelt GmbH, experienced in Haiti is reality for around a billion people in countless regions of the world that are not connected to their country’s central utility grids. And the prospect of these regions ever becoming electrified looks gloomy. Thousands of kilometers of power lines would need to be installed, operated and maintained. But this is unlikely to happen, due to not only a lack of technical resources but also investment policies that favor megaplants and power lines for heavy industry from governments hoping to benefit from tax revenue and enhanced prestige.

Looking at the long-term picture, however, the electrification of rural communities is absolutely vital for a country’s development. Without electricity, the digitalized world remains out of reach and social and economic participation and development are hampered. Those able to afford the luxury can light their homes with oil lamps or use diesel generators to produce electricity to power their cell phones and televisions. But the emissions from diesel generators are toxic to the environment – and all the more so given the rapidly growing population.

The solution – Off-grid systems based on renewable energy sources.

Diesel generators in a market square in Nigeria. Source: RLI

What are off-grid systems?

The smallest type of off-grid system is the solar home system, an autonomous PV system with a battery and inverter that at least allows people to use a lamp, cell phone or radio.

A continuous power supply to a specific region is possible thanks to mini-grids, which operate independently of the central utility grid and generate and distribute electricity to off-takers within a limited area such as a hospital, an urban neighborhood or an isolated community or island. Another option are micro-grids, which have smaller generation capacities and can either permanently operate independently of the utility grid or serve as a transitional solution until a planned connection to the utility grid is finally established.

Sustainable mini-grids use only climate-neutral technologies – photovoltaics, wind, hydropower or biomass – to generate electricity.

Cleaner, cheaper and smarter

Researchers at the independent, non-profit Reiner Lemoine Institute have developed a tool that visualizes scenarios for the electrification of specific regions or even the whole world by 2030.

Visualization of electrification scenarios in the Renewable Off-Grid Explorer tool developed by the Reiner Lemoine Institute

The Renewable Energy Off-Grid Explorer shows what level of investment and what greenhouse gas emissions can be expected if full electrification is to be achieved on current trends – or through different combinations and configurations of grid expansions and upgrades, new mini-grids and solar home systems.

This calculation shows, first, that it would be possible to supply the world’s population predominantly with off-grid systems. Second, this would cost less than the favored measure of expanding and upgrading centralized utility grids. Third, smaller, local utility grids based on renewable energies would generate only minimal greenhouse gas emissions, while solar home systems would generate none at all.

The accompanying study, sponsored by the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety, came to the following conclusion: Electrification by means of off-grid solutions based on renewable energies is cleaner, cheaper and smarter than all other options.

The model calculations conducted by the Reiner Lemoine Institute show that electrification by means of off-grid solutions based on renewable energies is cleaner, cheaper and smarter. Graphic: GIZ

A leading global trend – decentralized, sustainable and grid-independent energy systems

Institutions like the World Bank as well as a range of research institutes and economic experts have put off-grid systems firmly on the agenda. The incentive programs organized by the Climate Investment Fund, African Development Bank, German Society for International Cooperation (GIZ) and USAid as well as various initiatives launched by businesses and business-related institutions like the Rockefeller Foundation run to the billions of euros and US dollars.

After all, it’s thanks only to sustainable off-grid systems that the seventh UN Sustainable Development goal of ensuring universal access to energy has any chance of becoming reality without other sustainability goals aimed at mitigating climate change being sacrificed in the process.

According to a projection calculated by the ESMAP (a program launched by the World Bank), the installation of 210,000 solar-powered mini-grids could help to avoid 1.5 million tonnes of carbon emissions compared with traditional scenarios.

In short, mini-grids in combination with grid-independent PV systems offer enormous potential for helping the world to achieve the seventh UN Sustainable Development goal by 2030 in a cost-effective manner.

State of the Global Mini-Grids Market Report 2020

In practice, this massive investment can be explained by the fact that politicians hope that all this research will provide important insights into exports. Businesses want to secure sales markets – initially for technologies relating to renewable energies and then, as electrified regions become more prosperous, for additional products and services. And emissions trading needs projects that lend themselves to carbon compensation by means of certificates.

At the same time, the cost of manufacturing sustainable mini-grids has fallen significantly over the past decade, making them an even more attractive proposition. According to the ESMAP report, one kilowatt-hour of electricity generated by a mini-grid will be two thirds cheaper in 2030 than it is now.

All this will make it more likely that currently underserved nations will benefit from a comprehensive electricity supply by 2030. According to the ESMAP, 1,600 new mini-grids would have to be installed every year and in every country in order to achieve this goal, ultimately meaning that 40% of the world’s electricity demand would be generated and distributed by mini-grids.

Facts and figures on closing the power supply gap with the help of mini-grids.
Source: Mini Grids for Half a Billion People: Market Outlook and Handbook for Decision Makers 2019, World Bank / ESMAP

Pressure from below – no power, no vote!

The pace of development is also clear to see in some of SMA Sunbelt Energy GmbH’s ongoing projects. The company focuses on innovative off-grid, hybrid and battery based projects and helps local distributors set up their off-grid businesses. Project manager Heiko Stieber has commissioned a number of mini- and micro-grids in Africa and the Caribbean and is currently involved in a project in Senegal designed to provide around 330,000 people in more than 400 villages with access to electricity.

“There are regions here where it’s impossible to access the grid – nature reserves or areas that are simply too isolated,” says Heiko Stieber. “We are installing 78 off-grid systems in these areas, re-purposing in-situ shipping containers originally used on building sites. The photovoltaics systems provide protection against the sun, and part of the shipping containers will be used as commercial space. We are currently training up engineers from the Senegal National Electricity Agency (SENELEC) so that they know how to operate the systems.”

Since communities left out of current electrification plans are voicing their discontent with a cry of “No power – no vote!”, the Senegalese government is finding itself under pressure to act. For Stieber, it’s clear that the pace of electrification is set to increase rather than decrease.

„Our off-grid systems in Senegal are designed to be expanded.“

– As project manager for SMA Sunbelt GmbH, Heiko Stieber is helping to introduce off-grid systems in Africa and the Caribbean.

Planning and implementing off-grid systems are not easy tasks.

The term “mini-grids” might sound cute, but setting them up is seriously tricky. The engineers first have to establish the level and type of energy demand.

If just a handful of families need electricity only every now and then and for a foreseeable period, a solar home system is likely the best solution. A regional health center, however, might need only a small amount of energy but cannot afford any interruptions to its supply. The best solution in such a case is a solar hybrid system in which a diesel generator makes up for the energy that a PV system with battery cannot deliver at night or when it’s raining. The best solution for an entire district could be an upgradable mini-grid – although, again, choosing the right site is crucial here.

Philipp Blechinger, who heads the Off-Grid Systems research field at the Reiner Lemoine Institute, and his team make up for the lack of data by conducting empirical research and field studies and developing open modeling tools for planning off-grid systems and electrification strategies. “In 2021, for example, as part of the PeopleSun project, we surveyed 5,000 households across Nigeria to gain a better understanding of their energy requirements.”

„Electrification and climate protection need to be more closely dovetailed if we are to achieve the sustainability goals.“

– Dr. Philipp Blechinger heads the Off-Grid Systems research field at the Reiner Lemoine Institute.

It’s a matter of will – energy policy and obstructive regulations

„Our off-grid systems in Senegal are designed to be expanded,” says Stieber. “This means that they can be interconnected to create one big utility grid. Whenever these standalone grids expand to within five miles of the central utility grid, they have to be connected.“

But it’s precisely this “threat” of being connected that currently often hinders the expansion and upgrading of off-grid systems. Developers and investors are asking themselves what happens when the utility grid finally – if ever – reaches the region. In many regions, either there is no answer to this scenario or the official structures would put mini-grids and off-grid systems at a disadvantage. And it’s precisely these kinds of risks that are putting investors off.

This is why all the major studies conducted in this area recommend making decentralized systems part of national energy policy, planning and regulation. This means overhauling obstructive laws that prioritize grid expansion and upgrade projects above all else and defining a procedure for the transitional phase. Whether continued autonomous operation, state supply contracts or compensation – anything is better than a forced shutdown.

Sustainable change – opportunities for a better life

The electrification of a community or region heralds a whole new era. When children’s ability to learn is no longer dependent on how much daylight is available, this increases their chances of gaining a decent education and proper vocational training.

Electricity for equipment and machinery that help make work easier boosts both the productivity and earnings of local companies. Lighting makes new working hours possible. Cell phones and other mobile devices – in combination with a reliable mobile communications system, of course – allow companies to reach out to more potential customers.

And whether it’s the disruption-free operation of medical equipment, well-lit operating theaters or refrigeration for medicines, electricity dictates how effectively hospitals and health centers can function.

A question of balance – trends in electricity supply and demand

Anyone who thinks, however, that access to electricity will improve the prosperity of the local community overnight is mistaken. Establishing a connection to an off-grid system is just the start, for a variety of challenges still lie ahead. Stieber explains the situation as it is now, saying, “Workshops and other companies have always done many things by hand. There are no electric tools because, obviously, there is no electricity.” But a micro- or mini-grid will eventually start paying for itself only when there are dependable off-takers for the electricity produced.

So does the answer lie in a form of start-up financing enabling, say, a carpenter or tailor to purchase equipment, expand the business and, at some point, pay wages? Could specialist know-how helping farmers to process their harvests in line with market conditions help to ensure that more money is generated in the region? It would of course be more cost-effective and healthier for families to simply replace their climate-damaging wood- or kerosene-burning fireplaces, but, without an electric stove, cooking with solar power is unlikely to be a viable proposition. And last but not least, who’s going to service and maintain the mini- and micro-grids? One option could be to train up crews of solar and grid technicians and, initially at least, to pay their salaries. Whenever all these issues are not factored in or managed appropriately, PV systems can become susceptible to damage and neglected.

In the description of a project launched by the German Society for International Cooperation (GIZ), these support measures are described in the section entitled “Productive Use,” whereby the aim is to provide ”training and access finance for small and medium-sized enterprises, smallholder farmers and households, ensuring that electricity is used to drive economic development and making the mini-grid business model sustainable.” The partners from the skilled crafts and small businesses sector are also supporting technical and vocational education and training measures for solar and mini-grid technicians. And as part of another GIZ-run project to support the development of mini-grids in Uganda, 800,000 homes in Uganda were kitted out with state-of-the-art electric cookers.

And that is exactly what Blechinger finds so exciting about his work. “We have to operate at a highly interdisciplinary level because it’s about deploying technological innovations under difficult social and economic circumstances.”

„Some developers are targeting small businesses and industrial users alongside residential consumers, to increase the average level of revenues and hence profitability. Others are financing appliances to boost demand, or even becoming off-takers.“

State of the Global Mini-Grids Market Report 2020

A question of money – billing and tariffs

For mini-grid researchers and practitioners alike, the central issue in any project concerns billing and payment. According to Stieber, “In places like Tiburon in Haiti, there are customers who have an electricity connection for light, some music and maybe a television. Their electricity bill might be somewhere in the region of ten dollars. Energy meters as we know them are not an option there because the price of renting a meter and the self-consumption of the meter itself are disproportionately high.“

This is why local operators are always developing new usage and payment models. For example, with EarthSpark, Sunbelt’s development partner in Haiti, customers receive a card that they can charge in the office. “They then insert it into the meter and use their energy credit like they would their credit on a phone card,” says Stieber, explaining the prepaid model. “But new concepts are being developed all the time, like a meter to which customers can upload credit via their cell phone.”

Ultimately, the installation of a system like this brings enormous social change – and, for Stieber, this change in mindset is actually the biggest challenge in these kinds of project. “People first have to understand new things. In Africa, we installed systems for bush hospitals where doctors always performed surgery with their chins on their shoulders because they had become used to doing their work with a flashlight clamped between their chin and shoulder whenever the generator broke down.”

But when the power is at last turned on, the difference is like night and day. As Stieber says, “Street lighting alone makes people feel safer and, as a result, boosts social interaction. You’re more likely to go out and meet people. That evening, the first time when electricity was generated by a battery and there was finally light, it was thrilling to see how the whole community was revitalized.”

Mini-grids are nothing new

Almost all centralized utility grid systems in use today started out as standalone mini-grids that then became increasingly interconnected over time. […] These mini-grid systems, which were introduced in the late 19th and early 20th centuries, were crucial to the early development and industrialization of most modern economies, including Brazil, China, Denmark, Italy, the Netherlands, Spain, Sweden, the UK and the U.S.

Mini-grid manual published by the ESMAP, 2019 Executive Summary

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The fascination of the small steps that have so often moved big things – that is the core of “Sonnenallee”. Do something about climate change and global warming. Leave the following generations an environment worth living in. Think new, be courageous, have ideas and implement them. Sonnenallee tells the stories behind these people. Because we think that there is no more time to wait and see.

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