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Page 1: Enhancing access to green electricity in Africa – The role ...Enhancing access to green electricity in Africa – The role of off-grid and mini-grids Ivan Nygaard, Senior researcher,

General rights Copyright and moral rights for the publications made accessible in the public portal are retained by the authors and/or other copyright owners and it is a condition of accessing publications that users recognise and abide by the legal requirements associated with these rights.

Users may download and print one copy of any publication from the public portal for the purpose of private study or research.

You may not further distribute the material or use it for any profit-making activity or commercial gain

You may freely distribute the URL identifying the publication in the public portal If you believe that this document breaches copyright please contact us providing details, and we will remove access to the work immediately and investigate your claim.

Downloaded from orbit.dtu.dk on: Mar 28, 2020

Enhancing access to green electricity in Africa – The role of off-grid and mini-grids

Nygaard, Ivan

Publication date:2013

Link back to DTU Orbit

Citation (APA):Nygaard, I. (Author). (2013). Enhancing access to green electricity in Africa – The role of off-grid and mini-grids.Sound/Visual production (digital), Retrieved from http://um.dk/en/danida-en/activities/technical-advisory-services/danida-development-days/danida-development-days-2013/

Page 2: Enhancing access to green electricity in Africa – The role ...Enhancing access to green electricity in Africa – The role of off-grid and mini-grids Ivan Nygaard, Senior researcher,

Enhancing access to green electricity in Africa

– The role of off-grid and mini-grids

Ivan Nygaard, Senior researcher, PhD

UNEP Risø Centre, DTU, Denmark

Energy is key to greening the growth

Danida Development Days

29 May 2013

Page 3: Enhancing access to green electricity in Africa – The role ...Enhancing access to green electricity in Africa – The role of off-grid and mini-grids Ivan Nygaard, Senior researcher,

Outline of Presentation

• The green access challenge

• Technical, economic and

organisational options

• Key Issues for national

electrification programs

• Key Issues for international

support

Page 4: Enhancing access to green electricity in Africa – The role ...Enhancing access to green electricity in Africa – The role of off-grid and mini-grids Ivan Nygaard, Senior researcher,

Understanding access

AGECC concept

1) Basic human needs

– lighting, health,

communication

– 50-100 kgoe of modern fuel

or improved cook stove

2) Productive use

– irrigation, food processing,

cooling

3) Modern society needs

– domestic appliances,

heating, cooling

Energy plus approach

Holistic approach

addressing access +

general development issues

Reduced poverty

Basic needs + increased

affordability

Page 5: Enhancing access to green electricity in Africa – The role ...Enhancing access to green electricity in Africa – The role of off-grid and mini-grids Ivan Nygaard, Senior researcher,

Focus on electrification in Africa

• Half of the population – approx.

500 million - living on the

African continent have no

access to electricity today

• Without dedicated national and

international action this number

will increase and in 10 years

half of the people in the world

without access to electricity will

be on the African continent

• For most African countries the

“ultimate access objective” is to

provide electricity to the whole

population

• Focus on electricity does not

imply that other options for clean

energy services are not

important and many will play a

crucial role in an integrated

access strategy

Page 6: Enhancing access to green electricity in Africa – The role ...Enhancing access to green electricity in Africa – The role of off-grid and mini-grids Ivan Nygaard, Senior researcher,

Electricity access in 2009

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

100.0

Mal

awi

Uga

nd

a

DR

Co

ngo

Mo

zam

biq

ue

Tan

zan

ia

Bu

rkin

a Fa

so

Leso

tho

Ke

nya

Eth

iop

ia

Oth

er A

fric

a

Zam

bia

Mad

agas

car

Togo

Be

nin

An

gola

Erit

rea

Nam

ibia

Sud

an

Gab

on

Co

ngo

Zim

bab

we

Sen

egal

Bo

tsw

ana

Co

te d

'Ivo

ire

Cam

ero

on

Nig

eri

a

Gh

ana

Sou

th A

fric

a

Mau

riti

us

Ele

ctri

fica

tio

n r

ate

Source: IEA, World Energy Outlook, New electricity access database, 2011

• Poverty level (GDP)

• Access to hydropower

• Level of political stability

• Institutional models

Page 7: Enhancing access to green electricity in Africa – The role ...Enhancing access to green electricity in Africa – The role of off-grid and mini-grids Ivan Nygaard, Senior researcher,

The green access challenge

Access level

Green energy fraction

Under the condition:

Green Energy has higher higher cost

Growth ??

High

access level

High

green energy fraction

Low

access level

Low

green energy fraction

Poverty alleviation ??

Low

access level

High

green energy fraction

High

access level

Low

green energy fraction

High

Low

High Low

However:

Green energy is in many cases

already economically

competitive

Page 8: Enhancing access to green electricity in Africa – The role ...Enhancing access to green electricity in Africa – The role of off-grid and mini-grids Ivan Nygaard, Senior researcher,

A triple objective approach

Access, renewables, efficiency

• In cases where renewables are

the cheapest option renewable

energy can increase access

• Energy efficiency is important

and beneficial in small systems

with high electricity cost

• Energy efficiency can though

cost reduction increase access

Energy Access

Energy efficiency

Renewable

Energy

Page 9: Enhancing access to green electricity in Africa – The role ...Enhancing access to green electricity in Africa – The role of off-grid and mini-grids Ivan Nygaard, Senior researcher,

Experiences and data sources

Main sources

• Enhancing access to electricity for

clean and efficient energy services

in Africa. Draft policy paper

elaborated by Christensen,

Mackenzie, Pedersen (2012)

– Morocco, Ghana, SA

– Club ER

• Feasibility of Renewable Energy

sources in Mali (2009-12)

• Close contact to Rural

Electrification agencies in Mali,

Senegal (2009-2012)

• Experience from implementing

rural electrification in Burkina Faso

in 2001 and 2007

Additional sources

• Rural electrification planning in

Cameroun, Mali, Burkina Faso

and Cote D'Ivoire (2006)

• Business Models for Rural

Electrification from Agro-Industries

- The Case of Kenya, Tanzania,

Rwanda, and Malawi (2010)

• Technology needs assessment

project in:

– Sudan Morocco, Senegal, Mali,

Cote D'Ivoire, Ghana, Kenya,

Rwanda, Zambia, Mauritius,

Page 10: Enhancing access to green electricity in Africa – The role ...Enhancing access to green electricity in Africa – The role of off-grid and mini-grids Ivan Nygaard, Senior researcher,

The role of off-grid and mini-grid:

Technical, economic and

organizational options

Page 11: Enhancing access to green electricity in Africa – The role ...Enhancing access to green electricity in Africa – The role of off-grid and mini-grids Ivan Nygaard, Senior researcher,

Spatial delimitation,

markets and technologies

• Criteria

– Distance, Demand, Density

• Grid

– Hydro, Wind, Solar,

Biomass, Geothermal

• Mini-grid

– Hybrids: Micro-hydro, PV,

Wind, Biofuel, Biogas,

gasification,

• Off – grid

– Solar PV, Windpumps

Coverage 2007

2007-2015

Source: MMCE (2008). Vision 2020 de l'accès au services

énergétiques modernes au Burkina Faso. Projet MEPRED

2008 financed by EU, UNDP and DANIDA

Page 12: Enhancing access to green electricity in Africa – The role ...Enhancing access to green electricity in Africa – The role of off-grid and mini-grids Ivan Nygaard, Senior researcher,

Emerging Technological and

Market Opportunities

Mini-grids

• Hybrid-systems

– Mali: 5 PV-systems, 45 PV

and biodiesel planned

– Senegal: 10 PV systems

• Smart grids

– Life-link, mobile phones

– Surveillance, payment

systems, organisational

changes

• Energy efficiency

– LED lighting

– Efficient air-con, fridges

Off-grids

• Solar Home Systems

– Significant price reduction

– Local assembly/production

• Senegal

– Modular investment

– Market based diffusion

• Kenya

– Low cost engines

– Solar lanterns

• Energy efficiency

– LED (lamps, TV,

computers)

– Low cost inverters

Page 13: Enhancing access to green electricity in Africa – The role ...Enhancing access to green electricity in Africa – The role of off-grid and mini-grids Ivan Nygaard, Senior researcher,

Approaches to mini-grid electrification

and local participation/ownership

Community ownership hybrids

• Morocco: Joint ownership

– Utility, 20 %, Cross subsidy, 35 %,

Municipality 20 %, consumer 25 %.

Concessionaire: build and operate

contract

• Ghana: Self-help village committee

– Government ownership. Utility operation.

Show commitment by buying poles and

30 % wiring

• Mali - Senegal: Spontaneous private/Comm

– Showing interest to a private operator

– Private operator responsible for

operation and maintenance

• Burkina Faso: Planned cooperative

– Responsible for ownership and operation

with outsourcing of responsibility to

private operator

Country Elect.

rate

Morocco UtilityConces-

sionMunicipality 98

Ghana UtilitySelfhelp

scheme60

Senegal UtilityConces-

sion

Spontaneous

private42

Mali UtilityConces-

sion

Spontaneous

private11?

Burkina

FasoUtility

Planned

cooperatives15

Approach

Country Approach Electrification rate %

Ghana Utility + selfhelp - Rural electrificatin agency 60

Senegal Utility + concession + spontaneous private 42

Mali Utility + concession + spontaneous private 11 ?

Burkina Faso Utility + planned cooperatives 15

Rural electrification approaches

0

10

20

30

40

50

60

70

80

90

100

1998 2000 2002 2004 2006 2008 2010

%

Ghana Senegal Burkina Faso Morocco

Page 14: Enhancing access to green electricity in Africa – The role ...Enhancing access to green electricity in Africa – The role of off-grid and mini-grids Ivan Nygaard, Senior researcher,

Utility

Opportunities

• Access to technical

expertise

• Economy of scale

• Opportunities for cross

subsidizing from urban to

rural

Challenges

• Often conservative in

approach (e.g. SWER)

• No tradition for

community involvement

• Seen as part of the state

by consumers

• Often "negative" political

influence

Page 15: Enhancing access to green electricity in Africa – The role ...Enhancing access to green electricity in Africa – The role of off-grid and mini-grids Ivan Nygaard, Senior researcher,

Concessions

Opportunities

• Access to international

knowhow and finance

– ONE, EDF

• Economy of scale

– in investment

– in operation

• Favours innovative

systems

– such as hybrid PV/diesel

Challenges

• Time consuming to prepare

tender material and conditions

– six concessions in Senegal after

10 years

• Difficult to attract foreign/local

investors

– The concession system has been

abandoned in Mali due to that

reason

• Size of concessions

– Mali (8 +10), Senegal (10)

• Verification and control

Page 16: Enhancing access to green electricity in Africa – The role ...Enhancing access to green electricity in Africa – The role of off-grid and mini-grids Ivan Nygaard, Senior researcher,

Community participation

Opportunities

• More democratic

• Ensuring local needs

• Easy access to land for

poles and lines

• Donor-support

– Support from donor

constituencies

Challenges

• Expertise

– technical, financial

• Poverty level

– high subsidy rates necessary

• Commitment/dependency

– high subsidy rate

• Financial management

– Satisfaction of other needs

• Local conflicts

Page 17: Enhancing access to green electricity in Africa – The role ...Enhancing access to green electricity in Africa – The role of off-grid and mini-grids Ivan Nygaard, Senior researcher,

Organisational challenges for off grid

electrification

Model End-user Ownership Financing

provided by

Subsidy level for investment

Responsible for

installation,

maintenance and after sales service

Donation Institutions End-user Donor High, 100 % End-user,

committees

Commercially led

delivery model (cash sale)

Private End-user End user Zero End user

Multi stakeholder

programmatic model (credit)

Private End-user Donor,

financing institution, dealer, end-user

Low to medium Depends on

circumstances

Fee for service (dealer model)

Private, Institutions

Utility, Energy

Service Company (ESCO)

ESCO Medium to high ESCO

Fee for service (concession model)

Private, Institutions

Utility, ESCO ESCO Medium to high ESCO

Nygaard, I. (2009): Compatibility of rural electrification and promotion of low-carbon technologies in development countries -

the case of Solar PV for Sub-Saharan Africa. European Review of Energy Markets. Vol 3, No 2, 125-158.

Page 18: Enhancing access to green electricity in Africa – The role ...Enhancing access to green electricity in Africa – The role of off-grid and mini-grids Ivan Nygaard, Senior researcher,

Key issues for

national electrification programs

and

for international support

Page 19: Enhancing access to green electricity in Africa – The role ...Enhancing access to green electricity in Africa – The role of off-grid and mini-grids Ivan Nygaard, Senior researcher,

Key Issues for National Electrification

Programs I

• Political commitment – strong and sustained

– supporting factors

• Local political pressure

• Champions

• International dialogue and

targets

• Integrated national "vision" – Long term vision

– Balance central grid, mini-grid

and off-grid

• Institutional strength – No superior model for

electrification

– A strong central institution is

key

• Finance challenge – beyond current resources

– planning, institutional

strengthening, subsidies

– PPPs crucial for engaging

private sector

Page 20: Enhancing access to green electricity in Africa – The role ...Enhancing access to green electricity in Africa – The role of off-grid and mini-grids Ivan Nygaard, Senior researcher,

Key Issues for National Electrification

Programs II

• Stimulating productive use – Focus from the start

– Multi-sector involvement

necessary

• Role of Renewable Energy – Stand alone PV, social use but

not productive use

– Mini grids with hybrid systems

as an intermediate solution

– Central systems dominated by

hydro. Wind, Solar and

biomass close to grid parity

• Pro-poor subsidies and

tariffs – Subsidies needed

– Full cost recovery

• Design for gradually

build up – Mini-grids to build up

electricity markets

– Bundling introduction of

hybrid systems

– Avoid non-coordinated pilots

– Integrate electricity and

development efforts

Page 21: Enhancing access to green electricity in Africa – The role ...Enhancing access to green electricity in Africa – The role of off-grid and mini-grids Ivan Nygaard, Senior researcher,

Key Issues for international support

• Creating political momentum – Energy year campaign, AGECC, E4all

– Social and Development benefits

– Regional dialogues

• Institutional and policy support – Differentiated support for Institutional

strengthening

– Private sector, local government,

community engagement

• Stimulating regional cooperation – AU, regional communities,

– Power pools

– EU – Africa Energy

• Providing increased and

targeted financing – grant funding for visions, institutional

strengthening, subsidy schemes

• Enhanced donor coordination – Massive scale up contingent on

efficient collaboration

– Priority including funding from all

relevant multilateral organisation

• Internal donor coherence – Priority on energy and access in

broader development programs

– Long term engagement as important

for donors as for countries

Page 22: Enhancing access to green electricity in Africa – The role ...Enhancing access to green electricity in Africa – The role of off-grid and mini-grids Ivan Nygaard, Senior researcher,

Thanks for your attention !