Green Mini-Grids Africa Steven Hunt Energy Advisor
33 kv Distribution Grid Perimeter Off-Grid Perimeter Off-Grid Perimeter Solar/wind St-alone Systems MG Hydro MG 100 kv Transmission Justified by high population > X pop MG Biomass Figure 1 : Illustrative view of Grid Off-Grid perimeters (DFID-IED, 2013)
20% SSA 12% India SEFA Universal Energy Access 2030 3
Rural Electrification Centralised Grid-based Systems Aggreg. Connection Decentralised Mini-Grids (Micro - Smart) St-Alone Individual Systems (SHS, BCS, MFP...) Fossil fuelbased MG Hybridisation Low-Carbon or Green MG (One or more technologies) Hydro Biomass Wind Solar Hybrid Figure 2 : Rural electrification approaches (IED, 2012)
Figure 12: Payback period of hybrid PV/Diesel in Africa (RLI, Ch. Breyer, 2012)
Progress to date Consultation started IED study started (Nov 12) Concept Note approved (Mar 13) IED study missions in Ke Moz (Apr-May) Presention at Vienna Energy Forum (May) DFID scoping meetings in in Ke Tz (Jun) Detailed Options Assessment Ke + Tz (Oct) IED study complete (Nov) Business Case development ongoing
Key issues encountered Multiple context-specific barriers By project development stage By country By technology By mini-grid segment: o100kw 10MW Grid-Connect or Grid Proximate GMG o100kw 1MW Isolated Mini-Grids oless than 100 kw Isolated Micro-Grids oless than 5 kw DC-based Pico-Grids
Community led Developer led TANZANIA Entrepreneurial Environment Develop technical concept/ business plan Electrification plan resources map Identify Sites Clarity of l ownership status? Negotiate with Community/ offtakers lowners Availability cost of technical/ financial skills? Capable/ willing ministry clear policies (REA/ EWURA) ENABLING ENVIRONMENT Credit Ability to availability, agree rates, cost tenors reflective tariff (EWURA) Availability of Turnkey contractors Contract protection against Grid Arrival Market access for productive uses Business Plan Challenge fund (REACT) Community Org./coherence Electrification plan Resource map (NORAD/IED) Availability cost of technical skills? Facilitation, matchmaking (REA) Commission or conduct detailed feasibility study design including governance, EIA etc etc Secure agreement from regulator on relevant incentive approvals Secure funds to reach financial close on the project Construct the Mini- Grid customer connections managing overruns Operate maintain the minigrid collect revenues Organise identify GMG need Community Mobilisation support Get technical advice Preliminary Options assessment Negotiate with potential contractors/ develpers Matching grants for Project design (TEDAP) Transaction advisory Support (USAID? SREP?) Concessional Credit Line (TEDAP but still a GAP as will run out doesn t apply to smaller grids) $500 connection Incentive (TEDAP) End-User Finance? G ees on offtaker default (SREP) SUPPORTING SERVICES/PROGS
Community led Developer led KENYA Entrepreneurial Environment Develop technical concept/ business plan Electrification plan resources map Identify Sites Clarity of l ownership status? Negotiate with Community/ offtakers lowners Availability cost of technical/ financial skills? Capable/ willing ministry clear policies ENABLING ENVIRONMENT Credit Ability to availability, agree rates, cost tenors reflective tariff Availability of Turnkey contractors Contract protection against Grid Arrival Market access for productive uses Business Plan Challenge fund (REACT) Community Org./coherence Electrification plan Resource map Availability cost of technical skills? Facilitation, matchmaking (REA) Commission or conduct detailed feasibility study design including governance, EIA etc etc Secure agreement from regulator on relevant incentive approvals Secure funds to reach financial close on the project Construct the Mini- Grid customer connections managing overruns Operate maintain the minigrid collect revenues Organise identify GMG need Get technical advice Negotiate with potential contractors/ develpers Matching grants for Project design Transaction advisory Support Concessional Credit Line (AFD, not not for GMG) Connection Incentive End-User Finance? G ees on offtaker default Community Mobilisation support Preliminary Options assessment SUPPORTING SERVICES/PROGS
Key Programme Elements DFID SE4ALL AU/AfDB /NEPAD MDBs /IOs etc Other donors Invited PS CS reps Green Mini-grids Coord. Group (HIO?) Regional Green Minigrids Facility - Preparation, awareness, research, co-ordination cross-learning Public/MDB Window Community Window Developer Window Financier Window Ke GMGs Co-ord Group REA/MoE, bilats, PS, CS etc GMGs Kenya - Critical mass of investment delivery activity on GMGs Investment Fund Prep./Impact Fund Other progs SREP KEEP De AFD GMGs Tanzania - Critical mass of investment delivery activity on GMGs Investment Fund (TEDAP/REF) Prep./Impact Fund (TEDAP/REF) Connection incentive, G ees
Next Steps Finalisation of country detailed options assessment Country fund agreements Regional Fund design agreements HIO exploration Completion of Economic Appraisal Finalisation submission of Business Case Approval announcement (TBC - April 2014?)